City of Decorah might give rebates, not tax abatements, to new hotel complex

Developers are proposing to build a Fairfield Inn and Suites

The City of Decorah's lawyers and City Administrator Chad Bird are recommending a change in the way financial help might be offered to Rebound Hospitality for developing a $14 million hotel project on Highway 9.

Rebound Hospitality had originally asked for ten years worth of property tax abatements totaling around $1.5 million.  Now City of Decorah officials are discussing offering rebates on the property taxes the corporation would pay.

Bird says there are two advantages to offering rebates instead of tax abatements.  The City of Decorah could include conditions under which Rebound would have to qualify for the rebates, instead of offering the tax abatement whether or not Rebound fulfilled its promises.  "This is a better position for the city to be in because it's tied to performance," Bird told a city committee Thursday.

Using rebates would also give the city more flexibility in drawing up an agreement with Rebound Hospitality.  State law dictates to a large extent how tax abatements must be handled.

Under the proposal, Rebound Hospitality would pay its property taxes on the new hotel complex every March and September, then would receive the rebate checks in June and Decorah.

Bird says he has talked with Rebound Hospitality and they have agreed to the change.