MEMPHIS, Tenn. — Generous tax freezes have been a way of life for years to help the Memphis economy grow. Companies large and small have avoided paying property taxes — often for more than a decade — in exchange for locating or expanding in the Bluff City.
Despite frequent criticism, the practice is considered necessary and that was no different this week when the board responsible for economic development decided to grant a 15-year tax freeze to Loeb Properties. The move allows the company and its partners to build a 100-room boutique hotel near Overton Square.
Loeb Properties will save more than $6 million in property taxes, while the hotel will cost about $24 million to build and employ about 65 workers.
Most board members concluded that the company met the criteria for a tax freeze because the hotel would be located close to a distressed neighborhood. In addition, nearby entertainment venues, including the Hattiloo Theatre, are strong supporters of the hotel project.
Critics argue, however, that Loeb Properties could build the hotel without the tax incentives. They also question whether hotel employees will be paid adequate wages which is a genuine concern.
But in the end, a decent sized hotel will be a huge plus for Overton Square and surrounding businesses. And once again, a tax freeze is deemed the only avenue to get it done.