WALLINGFORD — A wording error in a resolution has opened discussion on whether the Town Council should reverse its decision to extend a property tax break to the new owners of the Hilton Garden Inn.
Councilors voted 7 to 2 on June 25 to transfer a tax incentive program from CT Wallingford, LLC, a holding company for Winston Hospitality, of Raleigh, North Carolina, to Emerald Hospitality Associates, of Westlake, Ohio.
The council resolution should have made the transfer to Walford Owner, LLC, a holding company for Emerald.
To rectify the mistake, the council was slated to assign the tax agreement to Walford at its July 9 meeting.
They ultimately postponed the vote to the correct business entity until next month.
Two terms in agreement
The council needed to approve the transfer because of two terms of the existing seven-year tax assessment agreement with Winston/CT Wallingford, LLC.
One of the terms states that if the property is sold, the town had the right to terminate the agreement. The other states that Robert Winston III, who bought the property in 2013 and cleaned up the dilapidated site, would remain a managing partner.
Councilors John LeTourneau and Craig Fishbein voted against approving the transfer during the June 25 meeting, saying it was a chance to recoup taxpayer money. Other council members said they voted for the transfer to keep Wallingford business-friendly.
The program would save the new owners nearly $355,000 over the next three years, according to calculations by the town tax assessor. The owners would still pay an estimated $299,000 in real estate taxes annually.
The hotel at 1181 Barnes Road sold for $13.9 million. The sale was finalized June 18. While the 139-room hotel will stay a Hilton, Emerald plans to invest close to $1 million to bring the hotel up to the latest Hilton standards, said Emerald CFO Art Borowski.
Agreement is void
LeTourneau said during the July 9 meeting that he felt the representatives from Emerald who attended the June 25 meeting “held that information from us.”
Council Chairman Vincent Cervoni said it was an “oversight” and that Emerald “wasn’t misleading us.”
“This is just correcting the name of the entity,” he said. “I don’t think there was any bad faith by Emerald … This really is a procedural correction.”
The June 18 real estate conveyance form lists the sale as being between CT Wallingford, LLC, and Walford Owner, LLC.
LeTourneau said it goes back to “the core of the contract.”
“We have the right to pull that money back,” he said. “It’s being prudent to the town, to the taxpayer.”
Fishbein said Emerald “sold a bill of goods” to the council by saying that Emerald’s behind the Hilton project with the backing of its other properties.
“...but that’s apparently not the case,” he added. “I just have a bad taste in my mouth from the representations that were made to us last time.”
Councilor Christopher Shortell said after the June 25 vote, he reflected on the discussion and the terms of the agreement with Winston.
“The agreement is void,” he said. “There’s nothing to honor. This is a new agreement if we do it …”
Councilor Joseph Marrone III said the council already agreed to extend the tax abatement
“We, in good faith, had a vote,” he said. “We’re a town that tries to fancy ourselves as being friendly to business … It seems to me a little specious in this instance that we decide because we can take the money back, let’s take it back.”