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Bloomington City Council Approves Tax Break for New Hotel

Councilman Marty Spechler speaks about tax incentives at the City Council Chambers Wednesday night

A new hotel coming to Bloomington will get tax incentives from the city. The Common Council approved an Enterprise Zone Investment Deduction or EZID for the downtown development at a special session Wednesday night.

A developer planning on building a Springhill Suites was seeking tax relief from the Tax Increment Finance or TIF district, which collects a tax to fund downtown development projects. The TIF district currently collects about $2 million each year from downtown businesses.

The council approved the EZID, which is similar to a tax abatement, 7 to 1. The EZID will save the developer, Paul Pruitt of Bloomington, $350,000 per year or $3-and-a-half million over the course of 10 years.

Councilman Dave Rollo voted against the EZID, noting that the building was already under construction. Rollo says he’s uncomfortable with what he calls “arbitrary tax breaks” that deplete the TIF fund and therefore the city’s ability to make improvements to the downtown.

“Why are we taking money out of the TIF, and the TIF is used specifically for infrastructure improvements downtown, to simply grant these – essentially tax abatements – when the hotel is already there?” Rollo asked. “There’s no – I don’t see any reason for the incentive.”

The new hotel is being constructed on North College Avenue. Pruitt says he plans to invest $18 million in the new, 158 room hotel, which is expected to employ more than three dozen people.

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