Elk Grove City Council unanimously approves tax incentive

Hotel developer to receive multi-million dollar incentive for 15 years

The Elk Grove City council voted unanimously Wednesday night to grant a multi-million dollar tax incentive to hotel developer Reynolds & Brown of Concord, CA. The incentive is for the construction of a new hotel on a parcel described as "blighted" by both the developer and city council.

The deal involves Reynolds & Brown to receive a subsidy of half the transient occupancy tax (TOT) receipts for ten years and a third for the final five years.

The hotel will be located just south of the Elk Grove cemetery where Stockton Blvd. and the Elk Grove Blvd exit ramp from Hwy. 99 converge. The lot was formerly a maintenance yard for CalTrans.

According to the city's staff report, the TOT will generate $5.1 million in revenue during the 15 year period. Reynolds & Brown would receive approximately $2.2 million during the course of the agreement.

Elk Grove resident and city council candidate Katerine Maestas asked the city council if they had given any thought to the wages that will be paid to the hotel employees in light of the multi-million dollar incentive being considered for the developer.

"Are we also providing some sort of economic incentive for our residents here in Elk Grove for better paying jobs," Maestas said. "I would like to know if we are taking this sort of step, are we going to make any sort of provision for a living wage at this site." Maestas asked.

Mayor Davis quickly responded "Is that it?"

Maestas persisted and said "Do you have an answer for that?"

"We will certainly deliberate on that," Davis responded.

During the deliberations, the council did not specifically respond to Meastas' inquiry.

Mayor Gary Davis said that incentives granted by the city were not taken lightly. An unidentified Reynold & Brown representative called forward by Davis said there would be 25 to 30 full-time employees, but said he would not quantify their salaries.

Council member Sophia Scherman noted the availability of public transporation at the site. "Public tranportation is available right across the street so those folks that don't need to, you know, drive their cars to work on that location will be able to take public transportation because it's right across the street," Scherman said.

Council member Patrick Hume asked city manager Laura Gill how the terms of the agreement were determined.

"We took the applicants proposal as is," Gill said.

Council member Mike Leary, who has been criticized for taking $6,000 in political donations from Reynolds & Brown this year, was silent during the entire deliberation with exception of quickly motioning for it's approval.