LAWTON — The Lawton Economic Development Authority delayed action recently on Lawton Lodging LLC’s request to renew the authority’s hotel/motel occupancy tax rebate program for the Hilton Garden Inn.
The authority considered the request June 15 but decided to table it indefinitely, giving the panel more time to review it.
Lawton Lodging, which manages the Hilton Garden Inn and the adjacent Lawton-Fort Sill Convention Center, receives a rebate of the occupancy taxes that the hotel generates under an agreement with LEDA. The maximum amount of the rebate is $3.5 million over 10 years.
The agreement began in March 2014 and is set to expire next year, but Lawton Lodging wants to extend it for another 10 years. The maximum rebate amount would stay the same.
The Hilton Garden Inn spent about $824,350 in 2022 and generated $689,564 in revenue, resulting in a loss of more than $130,000, Lawton Lodging manager Sam Kumar said in an April 21 letter to LEDA Chairman Fred Fitch. Kumar noted that the hotel generated twice as much revenue last year as in 2021, but still lost money.
Kumar also said the company is planning repairs and replacements at the convention center which will cost about one-quarter of a million dollars. On top of that, the company anticipates upgrading the hotel’s soft goods and furniture, fixtures and equipment within the next three years, which may cost several million dollars more.
“Based on all of the above, we kindly request you to get the LEDA authority’s approval to extend the HOT (hotel occupancy) tax rebate for the Hilton Garden Inn hotel for another 10 years as long as the convention center is in operation,” Kumar said.
‘We’ve done a lot of good
for the community’
The original agreement served as an incentive to help Lawton Lodging build the convention center, said LEDA Chairman Fred Fitch. He added that the agreement will expire next year, but Lawton Lodging wants an extension.
Eleven years ago, Lawton Lodging received a $4.5 million loan package from the Comanche County Industrial Authority to help finance the convention center. The package included a $3 million direct loan from CCIDA and a $1.5 million loan to the Lawton Economic Development Authority, which gave the money to Lawton Lodging for the convention center.
LEDA has since paid off its share of the loan package plus about $400,000 in interest. Lawton Lodging paid about $180,000 in interest during the hotel’s profitable years.
As of 2022, Lawton Lodging had essentially defaulted on its loan because it failed to repay the entire amount by the deadline. But CCIDA approved a settlement agreement in March 2022 that required Lawton Lodging to pay $740,000 toward its remaining debt of $2.42 million.
The payment reduced the total debt to $1.68 million, and CCIDA agreed to waive that amount.
Fitch said as part of the settlement agreement, Lawton Lodging said it would continue operating the hotel and convention center for another decade.
“They’re going to be there whether they do this deal or not -- or whether we do this deal,” he said.
Fitch said the convention center is a major asset to Lawton because it can accommodate activities including the Children’s Starlight Fund event, a fundraiser that supports Comanche County Memorial Hospital’s services for women and children. He noted that the 2022 fundraiser generated $300,000 for various hospital projects.
“We’ve done a lot of good for the community, and it’s been the result of having a convention center there,” Fitch said.
LEDA took its first look at Lawton Lodging’s request to renew the tax rebate program in May, according to minutes from the authority’s May 18 meeting. However, Fitch said he did not want the authority to make a decision then. Instead, he hoped the authority would take up the issue at a future meeting when more members were present.
Fitch said again on June 15 that he wanted to give the entire board a chance to weigh in on the request.
“I moved this from the last meeting to this meeting, thinking that we would have four more people here to be in on this,” he said.
‘Our best bet’
Lawton City Councilman Randy Warren, who represents the council on LEDA, suggested that the authority should revamp the rebate program to phase it out over time.
“I think our best bet is to figure out a way to wean them off and do a two-year, $700,000 deal or something like that,” he said. “Because you know as well as I do if we give them 10, they’re going to come back in 10 years wanting 10 more.”
Another LEDA member, Ernest Sheppard, suggested waiting to see whether Lawton Lodging takes a second look at its request.
“We have a year on this thing,” he said. “So if we just sit and do nothing, they may come back with another proposal that looks better. So I would suggest we just don’t do anything.”