Press Release--For Immediate Release

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Press Release--For Immediate Release Powered By Docstoc
					                                             Mayor Mary Clare Higgins
                                                  210 Main Street
                                              Northampton, MA 01060

                     Press Release--For Immediate Release

        Mayor Awards Round House Parking Lot Redevelopment for a Hotel
                               July 28, 2006

For questions: Mayor Clare Higgins                                             413-587-1249
               Wayne Feiden, Director of Planning and Development              413-587-1265
               Shardool Parmar, Pioneer Valley Hotel Group                     413-231-7540

       Mayor Mary Clare Higgins announced today that she is providing a preliminary
award of the redevelopment of the western side of the Round House Parking Lot for a
100-room full service hotel with conference facilities, a pool, and a restaurant.

       “A second downtown hotel is a perfect addition to our downtown. It will provide
more customers to support downtown, make Pulaski Park and the Round House Parking
Lot more alive and friendlier at night, and enhance the vibrancy of downtown,” Mayor
Higgins announced. “The new hotel will allow Northampton to capture lost hospitality
business, especially on weekends when rooms can be hard to find.”

       The site will be developed by the Pioneer Valley Hotel Group, Shardool Parmar,
President. Pioneer Valley Hotel Group has four other hotels in the valley, the Hampton
Inn and Quality Inn in Hadley, a Howard Johnsons in Springfield, and a Comfort Inn in
Ludlow. The new hotel in Northampton is expected to be at the high end of the market,
comparable with the Hotel Northampton.

        City Council voted unanimously to surplus the Round House property in the
spring to spur redevelopment in the City. A key element of this surplusing is that the new
development incorporate structured parking to replace all of the current public parking
and private spots within their building and provide adequate parking for their own use.
The rate for the replacement of the public parking spaces will be the same hourly rate as
the John Gare Parking Garage. The private hotel parking spaces will also be available to
the public when the hotel does not need them. Mayor Higgins pointed out that this
parking will help meet the demand for parking on the west side of downtown. This
project will be creating the second structured parking lot in the heart of downtown.

        The City calculates that the total benefit package to the City of selling this lot will
be $1,487,058 over ten years, including at least $1,362,000 in property and occupancy
taxes over ten years. The taxes will be guaranteed by a mortgage that will be payable to
the City regardless of actual tax receipts.
        “In addition to the sizable economic benefits and jobs to Northampton, a hotel
provides a huge tax benefit to the City because we get both property tax and a 4% hotel
occupancy tax,” said Mayor Higgins. The property has not been on the tax rolls since the
city acquired it in the mid-1970s.

        The preliminary bid award only begins a significant due diligence period. “This
is a great project and a great partner,” said Wayne Feiden, Director of Planning and
Development, project manager for the project. “Until Pioneer Valley Hotel Group
completes their due diligence there are no guarantees that this project will happen.”

       The property contains hazardous materials left from when the site was used to
manufacture gas from coal. That manufactured gas plant operated on the site for a
hundred years, closing in the mid-1950s, leaving behind a significant industrial legacy.
Bay State Gas is the responsible party for this site. Bay State Gas will be starting a
cleanup in January 2007 to address the requirements in the Massachusetts Contingency
Plan, Massachusetts hazardous waste regulations.

       The other bid the City received was from Tryumph Management for an office
building. “Tryumph also submitted a very strong proposal,” said Wayne Feiden. “In the
end, however, the long-term benefits from a 66,705 square foot 100-room full service
hotel was stronger and scored higher than from a 20,000 square foot office building.”

        The Mayor briefed City Council Finance Committee on Tuesday, July 25th, and
they were very supportive of the proposal. Staff will brief the Finance Committee on
August 15th and City Council on August 17th on the details of the proposal. The City will
be signing a formal purchase and sale agreement with the buyer in September after
discussing some of these details with the bidder and City Council.

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