Economic Impact Statement Proposed Headquarter Hotel Tax Increment Financing District 1441 Chestnut Street November 2013

Audit Date: November 7, 2013
Audit Categories
  • Other
Controller: Alan Butkovitz
Audit Tags
  • Commerce,
  • Economic Development,
  • Permits and Fees,
  • PIDC,
  • Taxes

Executive Summary

For Immediate Release:
November 7, 2013

Contact: Harvey Rice

Butkovitz Issues Impact Study for New Hotel on Chestnut Street
City Controller reviews PIDC’s analysis of the proposed
Headquarter Hotel Tax Increment Financing District

Economic Impact Statement: Hotel Tax Increment Financing District

PHILADELPHIA – City Controller Alan Butkovitz today released an Economic Impact Statement for the Proposed Headquarter Hotel Tax Increment for an anchor hotel to be built at 1441 Chestnut Street.

By reviewing the analysis performed by the Philadelphia Industrial Development Corporation (PIDC), the Controller supports PIDC’s proposal which indicates the anchor hotel would result in the following:
• create many jobs in both the construction and service sectors
• produce a marquee hotel that would meet demand from our Convention Center, and
• benefit from long-term revenue, which outweigh the short-term revenue costs

While the City’s risks seem relatively low and the rewards could be substantial, the Controller has reservations regarding PIDC’s Wage Tax revenue projections based on the permanent jobs that will be created once the hotel is open for business. Depending on the hourly wage and number of hours worked by the total employees, Wage Tax revenues over the course of the 20 years of the Tax Increment Financing could range from a low of $11.7 million to as much as $17 million.