Mayor and Council

   For the meeting on:

  November 5, 2012
   Department:   City Manager
   Responsible staff:  Jenny Kimball, Assistant City Manager
  phone: (240) 314 - 8104

Approval of Agreements Related to the City’s Grant of Monetary and Non-Monetary Incentives to Choice Hotels International (“Choice Hotels”) for Choice Hotels to Relocate to the City.

Direct the City Manager to execute formal agreements, in a form acceptable to the City Attorney, committing the City to provide economic and parking incentives to Choice Hotels in connection with Choice Hotels’ relocation of its headquarters to the City.

The effort to bring the Choice Hotels new headquarters into Rockville has been a partnership with the State of Maryland and Montgomery County. On August 15, 2011, the Mayor and Council discussed in executive session proposed monetary and non-monetary incentives for Choice Hotels to locate in the City. The Mayor and Council voted to approve and offer the recommended incentives to Choice Hotels. Choice Hotels accepted the incentives and began the process of relocating to the City.

Economic Incentives
As part of finalizing the incentive package, City staff is working with the State and County to finalize an Economic Development Fund Agreement (EDFA) that formalizes the economic incentives to be provided to Choice Hotels. The EDFA will include a $156,000 conditional grant contributed by the City. The County will advance the $156,000 to Choice Hotels from the Montgomery County Economic Development Fund. The City will repay the County's Fund in six annual installments of $26,000 each. The agreement will provide that payment is subject to annual appropriation by the Mayor and Council.

Parking Incentives
In addition, the Mayor and Council agreed to provide up to 275 parking spaces at a reduced rate in Town Square public parking garages for a period of ten years. At the time the Mayor and Council approved the incentive related to providing parking spaces, the City was managing the public parking garages in Town Square. Since that time, Federal Realty Investment Trust ("FRIT") has taken over the management of the City-owned parking garages. The City’s agreement with FRIT includes a provision that FRIT will honor the City’s agreement to provide parking incentives to Choice Hotels.

Other City Incentives
The Mayor and Council approved the following additional incentives which do not require a formal agreement to implement:

  • New Jobs Tax Credit – Upon meeting certain criteria set forth in the City Code, Choice Hotels will be eligible for a real and personal property tax credit. The eligible credit will depend on the total capital investment and the assessment rate and would be available for up to six years.
  • Permit Fee Waiver – This incentive provides up to $180,000 as a permit fee waiver that applies to plumbing, tap, building, electrical, mechanical, fire protection, occupancy and Public Works permits. Should the applicable fees total less than $180,000, the agreement indicates the difference will be added to the City’s Conditional Grant to Choice Hotels. The Mayor and Council has approved the City Manager to adopt regulations governing the permit fee waiver process.
  • Expedited Permit Review - Staff has implemented expedited permit review to date for this project and will continue that effort.

Mayor and Council History
These incentives were discussed and approved by the Mayor and Council on August 15, 2011.

Next Steps
With this Mayor and Council direction, the City Manager will be authorized to sign the Economic Development Fund Agreement on behalf of the City. The first $26,000 payment to the Montgomery County Economic Development Fund will be included in the City Manager's proposed FY 2014 operating budget.

The City Manager will also be authorized to enter into an agreement between the City, FRIT and Choice Hotels to formalize the agreement related to the parking incentives.

Assistant City Manager:

Jenny Kimball, Assistant City Manager
Approved on: 11/01/2012

City Manager:

Approved on: 11/01/2012