Gov. Tom Corbett has authorized another $20 million boost in state aid for the proposed W and Element hotels developer Brook Lenfest and Starwood Hotels plan to build on Chestnut St. south of Philadelphia City Hall, according to a letter Corbett's budget secretary sent the Philadelphia Authority for Industrial Development last week.
The $20 million in Redevelopment Assistance Capital Program money comes on top of an earlier $5 million comittment from the state program, which subsidizes developers. In his letter, Zogby notes the $20 million is "redirection or reallocation of prior encumbered funds that have been reprogrammed due to expired or terminated contracts in Philadelphia." City officials haven't responded to request for information as to which projects were scrapped to fund the hotels.
Separately, City Controller Alan Butkovitz released a report finding that "the City's risks seem relatively low and the rewards could be substantial" in added jobs and taxes for the hotel. But Butkovitz also called the city's projections for tax gains to be "optimistic", since most hotel workers are part-time, not full-time as in the city's pro-deal proposal. Butkovitz urged deal supporters to do a more careful analysis. See Butkowitz's report here.
According to a city estimate last week, the $341 million, 700-room project was in line for at least $75 million in tax breaks and aid, despite protests from seven rival hotel owners, some of whom have received and some of whom have both received and applied for additional tax breaks of their own.