Borough mulls funding $4 million parking garage related to hotel project

The proposed parking garage will be built separately from the planned "chip factory hotel" at 12 North Second Street and will require an updated design for the hotel.

Attendees at this week’s finance committee meeting received a last-minute revised agenda that packed a surprise: The borough is looking at funding a $4 million parking garage in downtown Columbia related to, but not dependent on, a hotel project already in the works. (Columbia Spy posted a press release about the hotel project HERE.) The proposal was presented as an attached one-page (plus two-line) "Project Description," which is a summary of the planned project, as shown below. [Editor's note: Some of the information contained in the summary differs from that which was discussed at the meeting.]

"Project Description

Columbia PA Hotel/ Public Parking Garage Project"

Under the proposal, the borough would plan and construct a four-story parking garage behind the former Becker Potato Chip factory at 12 North Second Street that Cimarron Investments LLC is redeveloping into a 60-room hotel/restaurant. The garage will contain 100 paid parking spaces, 60 of which would be reserved for hotel patrons, i.e., one per room. The remainder will be available for public use. The hotel building would contain elevator access to the garage, and parking would be overseen by some sort of management entity, such as a parking authority.

At the meeting, Cimarron CEO Don Murphy presented a tax map overlay and updated design for the project, showing how the garage would be built on a parcel behind the hotel. (The original plan was for hotel rooms to be built over a parking area.) The parcel, which is currently owned by Cimarron, would be conveyed to the borough.

Garage construction would be funded through a Redevelopment Assistance Capital Program 1:1 matching grant. According to pa.gov: "The Redevelopment Assistance Capital Program (RACP) is a Commonwealth grant program administered by the Office of the Budget for the acquisition and construction of regional economic, cultural, civic, recreational, and historical improvement projects." If a $4 million RACP grant is approved by the state, the borough will pay half the cost of the garage: $2 million. [Editor's note: The $4 million figure was quoted by borough manager Rebecca Denlinger at the meeting and differs from the $3.5 million presented in the summary. Denlinger told the committee that she uses a $25,000 to $30,000 per parking space to estimate the cost of a parking structure. Using those factors, however, the product does not equal $4 million.]

Murphy said the borough's funding of the garage would make the hotel project more feasible for Cimarron, because the company would not be required to abide by prevailing wage laws (and would obviously be spared from funding, maintaining, and managing the garage). If the RACP application is denied, a combined hotel and garage project could still be completed but on a smaller scale, with parking available for hotel patrons only, according to Murphy.

Denlinger noted two other mechanisms available to bring funding to the project: a Keystone Opportunity Zone (KOZ) designation and a Qualified Opportunity Zone designation. According to Denlinger, the KOZ issue is currently before the state legislature, and the borough should know by year’s end whether it will be approved. According to pa.gov: "Keystone Opportunity Zones eliminate specific state and local taxes within specific underdeveloped and underutilized areas." A Qualified Opportunity Zone designation has already been approved, however. Denlinger said that quite a large area of Columbia has already received this federal designation, including the block where the hotel site is located. irs.gov states: "An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment."

The finance committee voted to move forward with the next step of the RACP process to fund not only the hotel project but also a semi-defined project for the market house. If this second step is approved, the state will invite Columbia Borough to make a final, more detailed, application, at which time, the borough will be required to commit taxpayer funds.

Last spring, the borough briefly considered granting Cimarron $650,000 to help fund the hotel project until it was found that doing so would be unfeasible and illegal. Former borough manager Norm Meiskey and several citizens spoke out against the intended grant at the June Columbia Borough Council meeting. Columbia Spy posted related articles HERE and HERE.