LaGRANGE — The Troup County Board of Education voted at its Thursday evening meeting to approve the Memorandum of Understanding with Great Wolf Resort, a water park-themed resort.
The resort is expected to invest $150 million in the area and create between 300 to 500 new jobs. It is expected to open by Thanksgiving 2017.
Cole Pugh, superintendent for the Troup County School System, said he had stayed at a Great Wolf Resort in Texas around 10 years ago and was pleased and impressed with its amenities.
“This thing generates a lot of money,” LaGrange City Manager Tom Hall told the board. “… Every dollar of sales tax generated within the confines of this location … gets distributed to the school board, your E-SPLOST is not a part of this project. And the good news that we need to be telling the public on that is, their marketing efforts will swing about a 200-mile radius from LaGrange.”
The memorandum agrees to an abatement of ad valorem property taxes on the resort for the first 15 years, starting at a 90-percent abatement that reduces by 5 percent each year. After the 15-year period, the resort pays the full value.
All the tax-collecting entities — the city, county and school board — have to sign off on the agreement before moving forward. The County Commission is expected to consider the proposal Tuesday.
The development authority met last week and approved a $170 million bond issue for the resort and hotel, Hall said at a LaGrange City Council work session Tuesday. He also said the deal is a standard incentive offered by the authority for this type of project and it is on Great Wolf’s credit with “no recourse to the development authority or the city, or any other public entity.”
The city is on the hook for a $17 million conference center planned with the development. Hall said to account for the potential liability, three contingencies would have to be in place if the Great Wolf deal comes through.
First, out of the standard 8 cents on every dollar hotel-motel tax collected on the property, 4.5 cents would go to pay off the $17 million, taxpayer-backed bond.
“Based on a $17 million debt service, it is estimated that over 25 years, there should be $24.6 million in excess of what’s needed to retire the debt,” Hall told the City Council, adding that the city then would own the conference center.
Additionally, if the state signs off on the deal, a special tourism grant would be created and a trust fund established as a backup in case hotel-motel tax revenue doesn’t stack up. The trust fund would be stocked yearly using sales taxes collected inside the resort for a period not to exceed 10 years.
Thirdly, Hall said, the city would own the conference center, and the equity in it, so it could sell it at any time.
The board also approved an agreement to extend the Tax Allocation District, or TAD, agreement with Town Square for the planned downtown hotel at the site of the old Mansour’s department store at the corner of Vernon Street and Lafayette Square. A TAD allows a developer to secure bonds to develop property, pay a frozen tax rate on the property based on its value before development and use the difference from the increase in the ad valorem value to pay off the bonds over a set period of time.
The previously approved TAD for the project was set to expire at the end of the year. It will now expire June 30, 2016. Like the Great Wolf abatement agreement, all the local tax-collecting entities have to sign off on a TAD, agreeing to freeze their property tax collection rate.
James Morton is a reporter at LaGrange Daily News. He may be reached at 706-884-7311, ext. 2154.