ONTARIO -- A hotel management company seems likely to bring its next location to Ontario because of a potential tax abatement.
On Wednesday evening, Ontario City Council passed legislation in support of a 15-year, 100 percent Community Reinvestment Act (CRA) real property tax abatement for Ontario Hospitality Inc. in exchange for an annual $20,000 payment to the Ontario Local School District.
This won’t be finalized until also approved by the school district and developer, according to city council’s economic development committee chair and third ward representative Mark Weidemyre.
Weidemyre explained that the abatement is offered through one of three zones, which were designated by the city “a few years ago” to encourage development. The zones signal to developers that they can receive property tax abatement for the increased value of the property, typically for a term of 10 to 15 years.
“So we’re not actually losing anything, nor is the county because the land is still taxed at the rate it was taxed at,” Weidemyre said. “The abatement covers the cost of the building, the increased value.”
According to Hotels Online, Ontario Hospitality opened the 86-suite TownePlace Suites Mansfield, located at 1125 Guest Court, in June 2016. It operates as a Marriott franchise but is owned and managed by Ontario Hospitality.
Weidemyre estimated the proposed business would bring 25 to 30 jobs to Ontario, but he withheld the location and name of the potential development, saying he’d wait for the developer to make that announcement.
“The reason I’m supporting this (CRA tax abatement) is because it brings more business to the city,” Weidemyre said. “This is a tool we have … We looked at certain zones in the city where we wanted to spur development, and we passed these CRA zones a couple years ago, and it’s bearing fruit now.
"Basically, someone’s taking advantage of it who was going to build elsewhere (out of county). They’re now moving the project here.”
This is the first CRA real property tax abatement the city has approved, he added.