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Spokesman: Deal would deny Jekyll hotel tax break

State news

POSTED: October 6, 2012 12:00 p.m.

SAVANNAH — A spokesperson for Gov. Nathan Deal said Tuesday that the governor would deny a tax break for tourist attractions to a planned convention hotel on Jekyll Island because it would be unfair to competing hotels in the area.

Spokesman Brian Robinson said Deal already has given plenty of support to boosting tourism and conventions on Jekyll Island, where Georgia taxpayers have invested $50 million in a new convention center and beachfront park.

But developers of a planned 200-room Westin hotel on the island state park should never have assumed they would get a tax subsidy from the state, he said.

“A hotel will be very successful there on Jekyll Island,” Robinson said. “But that investment needs to be made on a level playing field with other competing hospitality businesses on the island and in the area. The governor has said we’re not going to use this sales-tax rebate in instances where the new entity competes with existing Georgia job providers.”

The Jekyll Island Authority said last week that delays in building the Westin have caused at least seven groups to back out of plans to hold conventions on the island in 2014.

Developers were supposed to break ground last month, but couldn’t get financing. The developer planned to secure its loan with a tax refund for tourism projects signed by the governor in May 2011.

But 16 months later, the tax break remains unavailable to businesses.

Jekyll Island officials are working to help developer Jekyll Landmark Associates find another source of financing.

Meanwhile, other projects looking to apply for the tax break will have to wait until at least next year.

Robinson said the state agencies in charge of writing rules and regulations needed to implement the program plan to send the tax break back to the legislature for changes in 2013.

The 2011 law, called the Georgia Tourism Development Act, seeks to encourage development of museums, cultural centers, theme parks, convention hotels and other tourist attractions by allowing qualified businesses to keep a portion of the sales taxes they collect for up to a decade.

But the rulemaking agencies say eligibility requirements built into the law are too complex and subjective compared to other tax breaks.

Applicants would have to show at least 25 percent of visitors would come from outside Georgia, and they would not be allowed to compete with existing businesses.

And unlike any other tax break in Georgia, the governor would get the final say in approving or denying applications.

While the state hasn’t begun taking applications for the tax break, it’s still generated controversy.

A group of Savannah hoteliers and tea-party activists protested last year when developers said they planned to seek the tax refund for a proposed convention hotel near the city’s downtown historic district, which already is packed with hotels and inns.

A Deal policy adviser cited the no-compete provision in an email to Savannah Rep. Ron Stephens, the law’s author, saying Deal likely would deny the tax break for that project.

 

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