Gulf Shores will receive $4.5 million in incentives from Embassy Suites developers

Gulf Shores will receive $4.5 million in incentives from Embassy Suites developers
By John Mullen
The City of Gulf Shores will receive about $4.5 million in incentives from D.D. Partners which is taking over a beach road city-owned parcel to build an Embassy Suites hotel with an upscale restaurant. The mayor, city council and city staff discussed the agreement during Monday’s work session.
In return, the city will give the company a 42 percent rebate on taxes generated for three years and a rebate of 35 percent each year thereafter until the total reaches $6.5 million. It is estimated the company would reach that threshold after eight years in operation. The rebate will not include taxes that support education, transportation or beach renourishment in the city.
City officials project new tax revenues of more than $11.2 million even by giving the rebates to the company. Additionally, the city expects to see $1.8 million in tax revenue generated during construction and $22.6 million during the first 10 years of operations.
An economic study by Dr. Keivan Deravi, Dean of the College of Public Policy and Justice at Auburn University at Montgomery, indicates the project will have a communitywide economic impact of $65 million.
DD Partners will give the city $1.2 million in cash to build 150 new parking spaces in the Gulf Beach District. Additionally, the company will give Gulf Shores a $3.3 million letter of credit as security for the property. The agreement also says the company will secure enough financing to finish the project.
The total cost of the mixed-use project will cost about $85 million and include 229 hotel rooms, the restaurant, street-front retail, 11,800 square feet of conference space including a 7,800-square-foot ballroom, full-service spa, indoor pool and fitness center.
Topping the entire project will be a 23,000-square-foot outdoor rooftop with a pool, bar, lounge and event terrace overlooking Gulf Place.
“The ability for this project to significantly enhance the amount of conference and meeting space within the city in order to bolster shoulder season business opportunities for all local businesses was a critical factor in the selection process,” according to a city report. “The development team and Project Selection Committee worked diligently with executives from Hilton and Gulf Shores and Orange Beach Tourism to ensure the conference center was designed to complement the meeting space at The Lodge at Gulf State Park and right-sized to fill a critical void in our market.”
The city began seeking investors for public-private partnership in 2015 to develop the 1.93-acre parcel on West Beach Boulevard behind Alvin’s Island and across the street from De Soto’s Seafood Kitchen.
It is part of the city’s effort to develop the Gulf Beach District into a walkable area to reach out to tourists and be a catalyst for more development in the area. The project also fits in with the goals of the city’s Small Town, Big Beach Vision 2025 plan.
Also during the work session the council:
• Awarding a franchise to The Dumpster Guy for collection and disposal of construction and demolition debris. City staff recommended a 28-month contract and said the company gave the city good service in the past.
• Reappointing to members to the Airport Board and to the Gulf Shores and Orange Beach Tourism Board. Councilman Joe Garris and Craig Olmstead were recommended to serve another six-year term each on the Airport Board and Mac McAleer was recommended for another four-year term on the tourism board.
Pictured: Architectural rendering of the E