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Hotel developer to ask city for extra extension

The hotel in Dade City will get negotiated tax breaks only if it is finished by September. But construction has barely started.

By MOLLY MOORHEAD
Published July 31, 2006

DADE CITY - Since a ceremonial groundbreaking last August on the city's first full-service hotel, only grass has sprung from the site on U.S. 301 south of downtown.

But in the past two weeks, the grass has disappeared, replaced by smooth reddish clay. Workers drive tractors and front-end loaders around the lot next to a KFC fast food joint.

Perhaps most telling: A sign between two wooden poles announces "Another Hampton Inn, opening Spring 2007."

Construction has begun on the long-awaited hotel, a project lauded as a spark for economic development but itself plagued by delays and conflicts with City Hall.

Because of the repeated delays, developer Piyush Mulji is now at another crossroads with the city. He has been promised thousands in property tax reimbursements but only if the hotel is completed by September. That's impossible.

Soon he'll ask city commissioners to give him months more to finish the $5-million project and still honor the tax incentives.

"We're seeing the light at the end of the tunnel. We're excited about getting the job done," Mulji said last week.

Barring a hurricane delay, he said, the hotel should open in April or May.

Mulji, who moved from Atlanta this year to the Lake Jovita Golf and Country Club community, first approached the city in May 2004 with plans to build a three-story, 64-room hotel with space for conference rooms.

Mulji asked for $325,000 in tax incentives; the city countered with a $150,000 package. Mulji would pay all permitting and impact fees up front and then be reimbursed in property taxes once the hotel was built.

The two sides settled on the smaller figure, signing an agreement in January 2005 that required Mulji to close on the 2.7-acre property within 45 days, start construction within six months and be done in a year.

Mulji missed the deadline to buy the land, and commissioners granted him what they called a one-time only extension giving him 20 days to close and 150 days to start moving dirt.

Two weeks later, Mulji bought the land for $443,000.

He held a golden-shovel ceremony last August, attended by city and county commissioners and many local business leaders. The City Commission had given him another short extension by then, to start building by the first week of September.

But months passed and the site looked more like a cow pasture than a construction zone. Mulji said late last year that labor shortages and design changes mandated by Hampton were holding up the project.

"We had a number of things change along the way, and each change tends to create another change," Mulji's attorney, Leonard Johnson, said last week.

By April, City Manager Harold Sample lost his patience, noting that the area's development climate no longer demanded any tax incentives.

He said there was no way the hotel could be completed by the September deadline and recommended that commissioners nullify the agreement reimbursing Mulji for property taxes.

He got nowhere. Commissioners voted in April to maintain the agreement, citing Mulji's commitment to the community.

Mulji is counting on that faith again.

Johnson plans to speak to commissioners at their meeting in August to update them on the project, lay out the new time line and ask for yet another extension.

"What both Mr. Mulji and the city want are the same thing, which is a hotel built as quickly as it can possibly be built," Johnson said. "I think we can make a pretty good argument that that's what's happening."

[Last modified July 30, 2006, 21:59:34]