Utility deal reached on hotel project (06/14/06)

This time around there were no tempers flaring.

Just a yes vote that eliminated a large hurdle for a developer of a hotel project north of Portland.

Members of a local board gave tentative approval to an agreement between a former Portland man and the city for sharing the cost of utilities to be run to the site of his hotel project — enabling the long-delayed project to move forward.

Project developer Scott Daniels is still waiting on approval for highway access from the Indiana Department of Transportation.

Getting approval from INDOT isn’t the only issue which could still delay the project. Daniels also is hoping to get the property annexed into the city so he can apply for a tax abatement. The annexation process takes about 60 days, said city attorney Bill Hinkle.

But after clearing the big utilities hurdle, Daniels was optimistic that he could still have his hotel up and running in the near future.

After Tuesday’s Portland Board of Works meeting, he said, “I’m very pleased with the outcome of the meeting. We’re still moving forward and we hope to have (the hotel) up by 2007.”

Tuesday’s board meeting was much more mellow than an April 20 meeting in which Daniels asked the city to pay for water and sewer lines to be run to the site where he plans to develop a 73-room Holiday Inn Express.

During that meeting, tempers flared, and the board tabled the request.

Hinkle said Tuesday that after the April meeting, city officials and Dascoda LLC, of which Daniels is the president, began negotiations.

The 10-year agreement estimates that the price to run water and sewer lines from the end of the city’s existing lines, which stop near Jay Products, 0086 East 100 North, to the hotel site, which is located north of Portland along the east side of U.S. 27 north of Oakwood Mobile Home Park, will be about $332,000.

Dascoda will be responsible for paying $150,000 toward the cost of extending the lines, with the city paying the balance.

Of the Dascoda portion, $75,000 will be paid in cash and the rest will be put into an escrow account at First Bank of Berne as soon as the company gives the city the go-ahead to run the lines.

The Portland City Council voted in December to rezone 60.92 acres to highway service from agricultural.

Bob Brelsford, wastewater treatment plant superintendent, said this morning that the extension of the water and sewer lines is about 2,200 feet. Both the water and sewer lines would run along U.S. 27. Any residences or businesses located within 300 feet of the sewer line would be required to tap-into it, he said.

Oakwood Mobile Home Park, 1237 North U.S. 27, is already hooked into the city’s sewer line.

Having the lines in the area would “basically open it up for development,” Brelsford said. The line extension work would take about three weeks to complete, he estimated.

The agreement states that any business in the area wishing to tap-into the sewer line would pay a $10,000 tap-in fee to Dascoda. The company could receive up to $150,000 in tap-in fees, until the agreement terminates.

If a business wants to tap-into the line and the fee would create a financial hardship for the business, the city retains the option to waive the tap-in fee. With this agreement, residential customers would not be required to pay a tap-in fee.

If Dascoda should give the city the nod to install the lines after Dec. 1, the terms of the agreement will change.

If the cost of the line installations increases after that date, Dascoda would be responsible for paying half of the increase. If the cost increases before Dec. 1, the city would pay the difference, Hinkle said. The agreement states that the city would be responsible for maintenance and upkeep of the new lines. The document also states that Dascoda has requested that the land for the project be annexed.

“Since they’re going to be annexed into the city, I feel it’s okay to accept the maintenance of the lines,” said board member Bob McCreery.

However, if the city council does not approve annexation, the city shouldn’t be responsible for the upkeep of the lines, he said.

“We have every intention of being annexed into the city so we could get a tax abatement,” Daniels said. “I can’t start the tax abatement until the annexation is done.”

Hinkle said the cost sharing agreement could be tentatively approved, with final approval delayed until the land is annexed.

McCreery made that motion and Bruce Hosier, mayor of Portland, seconded it. Board member Dolphus Stephens did not attend the meeting.

Hinkle said the annexation request and the agreement will have to go to the Portland City Council for approval. The agreement will be submitted as part of a fiscal plan required for annexation. This plan will include how the city would handle utility services, trash pick up, and police and fire protection to the hotel.[[In-content Ad]]