Second hotelier seeking special tax agreement in Lenox

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LENOX — As the Select Board continues wrestling with a policy for developers seeking tax breaks to jump-start their projects, a second hotel owner has applied for a special tax agreement for a decision by annual town meeting voters in May.

The Mahida family's hospitality group has a certified citizens petition on file at Town Hall asking voters to direct the Select Board to grant a 10-year property tax reduction for the proposed 100-suite extended stay hotel and event center on the site of the 120-room Magnuson Hotel at 130 Pittsfield Road (Routes 7 & 20), which would be razed. The project is now billed as Lenox Manor.

The petition was submitted as the Select Board still faces a decision on whether to grant a 10-year special tax agreement for the Toole Lodging Group, now constructing a 92-room, $8.3 million Courtyard by Marriott hotel on Brushwood Farm property across from Lenox Commons.

Joe Toole's proposal seeks $835,000 in property tax savings over a 10-year period. The Mahida petition assigns no dollar value to its application but calls for an agreement "consistent and equitable with those being provided to other new hotels this year or beyond."

The goal is to create a level playing field, said David Carpenter, director of administration for the Mahida hospitality interests, in an Eagle interview.

The Mahida group unveiled plans to demolish the Magnuson — previously an Econo Lodge and a Holiday Inn — and replace it with a 100-suite facility affiliated with a national brand still to be determined.

Asked why the tax-reduction proposal emerged through a citizens petition, Carpenter said "we just wanted to make sure that we were in the first wave of hotels considered by the voters."

"We are basically saying, how you treat one new hotel project is how you should treat others, and not just ours," he said.

Carpenter applauded the Select Board for working to define a procedure to handle applications for tax incentives, calling the effort "incredibly thoughtful."

He also pointed out that approval of policy guidelines might be delayed until close to the annual town meeting on May 5.

"We feel it's important that the voters have a solid context," Carpenter added, since there are likely to be additional hotel projects whose owners may seek tax incentives. "The encouraging thing to us is that the selectmen appear to be equally focused on defining a process that will create a level playing field."

Carpenter said the Mahida group has made it clear to Town Hall leaders that if their formal application can be considered at the same time as Toole's, "we'll be glad to withdraw [the citizens petition] or technically do whatever is needed to merge the two together."

However, he said, "we've taken no position or made any comment about Toole's application or anything about his situation."

Likewise, Toole declined comment on the Mahida citizens petition, but stated that the Select Board's efforts to craft policy guidelines based on a point system for each application "seems to be a very intelligent approach to determining the worthiness and value of a project to the town's finances."

He also said that his Marriott project at Brushwood Farms is on track for completion and an opening in late spring of 2017.

"I want to work through and with the town planner and selectmen as well as any other interested board or committee in this process," Toole said.

Carpenter, predicting that the Mahida project would be a strong generator of business in Lenox, said: "We think this is best resolved by the populace and the Selectmen and that's why we're watching the process carefully. I would hope all projects would be treated on an equitable basis."

Making a "quite favorable" case for "giving us some of this incentive, if there is any," Carpenter cited the Mahida project's replacement of a "distressed property" with "one of the finest lodging properties available in the Berkshires."

He also described as a "critical element" the development of a "world-class events center that's going to be truly an asset for the town."

Its capacity is 500 guests for large weddings or conferences, he said, "and there will be a spillover benefit" to other lodging facilities in the area.

In the Mahida group's petition, the hotel developer committed to creating at least 25 full-time equivalent jobs.

Carpenter depicted the figure as a firm one, especially since the Select Board is "appropriately looking at 'clawback' provisions so if somebody doesn't generate the jobs they're supposed to," some or all of the tax savings would have to be returned.

An application seeking approval for the Lenox Manor hotel, including traffic and engineering reports, is on target for submission to the Zoning Board of Appeals by March 31, he said. The town is also conducting its own traffic study.

Contact Clarence Fanto at 413-637-2551.

Owner: 130 Pittsfield-Lenox Road, LLC (a Mahida family company)

Location: 130 Pittsfield Road (Routes 7 & 20), site of the Magnuson Hotel to be demolished

Suites: 100 in an upscale extended-stay hotel with a kitchenette in each unit; affiliated with a national brand, including a 13,500 square-foot events center with a capacity of 500 people.

Project cost: $20 million-$22 million (includes $15 million for construction, plus engineering, legal, interest on bank financing and other "soft" costs)

Expected annual lodging, property tax revenue for Lenox: $400,000+

Construction and design: Architect Robert Harrison, landscape architect Rob Akroyd

Project goals: Establish Lenox Manor (together with Cranwell) as a premiere, year-round corporate retreat location; make Lenox the center for variety of regional events such as charity galas and headquarters for running races; enhance town's reputation as a leading wedding destination, thus extending the summer season.

Source: Mahida Hospitality Group.


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