3.4. SR 06-29-1998
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**Item 3.4.**
MEMORANDUM
TO:
Mayor & City Council
~ROM:
Paul T. Steinman, Director of Economic
Development
DATE:
June 23, 1998
SUBJECT: SAC/WAC Calculation Method - Hotels
and Motels
Staff has had several discussions over the past two months with a developer
proposing a hotel project in Elk River. The developer indicated from the
onset that a hotel project of this type will not become a reality in Elk River
under the current SAC/W AC calculation method. It is staffs understanding
that the Council has previously generally discussed that an adjustment
might be made which will allow for a reduction in the cost of these services to
a hotel developer. With this in mind, staff has determined that a more
appropriate calculation method for hotels and motels which will lower these
SAC/W AC charges by 50 percent. The ordinance currently calculates that
one SAC and one WAC is to be paid per unit. Staffs discussion has been that
it would be appropriate to reduce this calculation method to .5 SAC and .5
WAC per unit.
On the proposed hotel project, this would mean a reduction in SAC/W AC fees
to the developer from approximately $210,000 to $105,000. The developer is
planning to submit information on June 29, 1998, for the Planning
Commission agenda, to proceed with this project should the Council
authorize staff to complete an ordinance change allowing for the change in
the calculation method as discussed.
From an economic development perspective, west business park prospects
have consistently inquired about locally available "Class A!' hotel facilities for
company clients and overseas visitors. One specific prospect is currently
waiting to see if a hotel project is going to proceed within the next several
months in the city of Elk River. This prospect is putting a lot of emphasis on
the need for newer hotel facilities to accommodate clients and visitors to its
facility.
13065 Orono Parkway. P.O. Box 490. Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
Recommendation
Staff recommends the Council authorize staff to proceed with an ordinance
change to reduce the SACIW AC calculation method for hotel uses from one
SACIW AC per unit to .5 SACIW AC per unit.
If there are any comments or questions please call me at 441-4905 as I am
unable to attend the June 29 Council meeting.