— By TYLER MASK
People of all ages and demographics showed up for what could be considered a favorable turnout to Tuesday night’s Baker Hotel 4B town hall meeting, put on by the Mineral Wells Area Chamber of Commerce.
The town hall meeting was held in advance of the May 10 special election to determine whether $4 million in public funds paid for using sales tax revenues will be dedicated to the $56.2 million restoration project. Early voting begins Monday.
To kick off the meeting, Baker Restoration Team’s Chad Patton gave some background information on who the development team is and the project that is six years in the making.
The Baker Development Partners LLC (Baker Restoration Team) is as follows:
• Finances and managing member Laird Fairchild.
• Finances and managing member Chad Patton.
• Finances and managing member Brint Ryan.
• General contractor and member Mark Rawlings.
• Operator and member Jeff Trigger.
• Architect, design and procurement team and members Kurt and Beth Thiel.
More than a decade ago, Fairchild began hunting on some property just east of Mineral Wells. Patton would join him on an occasion. After several trips through Mineral Wells, they began falling in love with the city and started having hopes for a restored Baker. More than half a decade later, things are all seeming to come together, and the dreams are becoming a reality.
“In brief, what we are trying to deliver is a four-star destination resort, spa and conference center.” Patton said. “So, let’s date back to what the hotel was in the late ‘20s, and the ‘30s, ‘40s and ‘50s, when folks came here to enjoy the mineral baths and enjoy a nice retreat and relaxation and get out of the city … that is exactly what we are bringing back to Mineral Wells with the hotel.”
Instead of having 450 rooms, the team is scaling it back to a more appropriate size of around 155 rooms. The spa will be brought back, but will include a fitness club. The cumulative meeting space, which is more than 20,000 square feet, will be brought back to life, and will allow for all sorts of events and meetings to take place. The cloud room will be restored to its former glory, and patrons will be able to dine the night away on the rooftop. This will all be made possible by creative funding, Patton said.
“Brint owns a company called, Ryan Co., which is an international tax firm that specializes in creative tax structures. And that’s exactly what this project is. It’s a $56.2 million project, that when completed and when stabilized, has a valuation of about $35 million. So, you can imagine, six years ago, when we dove into this project, that going to a traditional bank in 2008 when the market had crashed and asking them to provide traditional debt-financing on a project that costs $56 million that was only valuated at $35 million, would be a pretty tough task to ask. On the flip side, when you go and try to find equity investors, there weren’t very many out there that were willing to take a bite out of that apple. So, we had to find creative financing sources.”
All of which are coming together. Much of the financing is based on historic tax credits, both federal and state, and new market tax credits. A large chunk, however, is the EB5 financing, which totals $24 million of the project funding. In a nutshell, the investors with the EB5 are waiting for proof of local support, which is where the 4B Sales Tax reallocation comes in.
Enter Mayor Allen’s part of the discussion.
The 4B Sales Tax is a reallocation of one eighth of a cent of sales tax dollars, Allen said. Each eighth of a cent would then be put into an economic development fund, which would turn into nearly $300,000 per year that wouldn’t go into the general fund.
“The city will lose $300,000 in revenue,” Allen said. “We are prepared to cut back and absorb that for a couple of years, because we believe that when it opens up, we will be doing fine.”
Last year, Mineral Wells had nearly $250 million in taxable sales. Allen projected if Mineral Wells accrued $275 million per year in sales, it would levy the the $300,000. When the Baker opens up, it is projected to single-handedly raise the majority of taxable dollars to levy the reallocation, Allen said.
“We are going to have to tighten our belt at the city, but $300,000 isn’t near what we had to do six years ago with $2 million, and we did that without cutting services, without layoffs, without furloughs, [while] giving you the services that you need.”
Patton expounded on the matter by explaining that the $300,000 doesn’t really go away, it simply gets reallocated to the 4B economic development fund for the city to use on various projects within the fund’s guidelines.
“There are a couple of options that the city will have after that $300,000 gets re-appropriated to the economic development fund,” Patton said. “Option one, the option we are asking for, is that that first $300,000 goes towards the service of debt on bonds ($4 million in all) that would be floated in order to support the Baker Hotel. But any additional dollars that are generated can be used for any other economic development program that Mayor Allen has identified per the 4B statutes.
”Even if the Baker Hotel restoration project falls through, the economic development fund does not go away and can be used for other projects within the city. If it is decided that the fund is no longer needed, it will be put to a public vote to repeal the motion.
Questions hovered around the Baker restoration and the 4B Sales Tax reallocation for the remainder of the session. No one left unsatisfied with the outcome – at least no one who spoke up. Many even took the microphone to express their excitement and gratitude towards the team.
In the end, Mayor Allen noted that the Baker is a pinnacle of hope for the community, and Patton made the audience aware of just how committed the team is to seeing this project through.
“This is an opportunity for this community to make a statement that we want to grow,” Allen said.
“I just want to conclude by saying thank you for the opportunity this evening to give me and our team a platform to share the details of this project,” Patton said “… The Baker, as you already know … reaches coast to coast. We pray every single night that God continues to guide us. … We will be here, God willing, to the end. All I can tell you is that if we do run into a couple of road blocks down the road, it doesn’t mean we are walking away. It doesn’t mean we are giving up. It just means that we’ve got another road block. And let me tell you, over six years, we have hopped over a number of these road blocks. So, stick with us.”