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Attachment #1 Amin Concord LLC Proposed OPA Amendment Hilton Garden Inn 524 Lewelling Boulevard Joint Redevelopment Project Area Background: . In July 2000, the Redevelopment Agency and the Developer entered into an Agreement to develop a hotel. . At the time of the Agreement the hotel "flag" was not known. . The Agency agreed to provide $210,000 of assistance to offset the costs for certain landscaping upgrades to the property. . A total of $96,298 of assistance has been provided to date. . Due to early concerns about long-term residents and the property converting to apartment-like use two key restrictions were included in the Agreement: o Maintain an Automobile Club three-diamond rating. o No exemption from transient occupancy tax ("TOT") for long-term contracts. . Project is now operated as a three-diamond, full-service Hilton Garden Inn. . Developer desires to secure contracts with airlines based out of Oakland International for rooms that would be exempt from paying the TOT. . Project generates approximately $250,000 annually in TOT to general fund. Proposed Amendment: . The developer has approached staff for relief from the prohibition on TOT exemptions. . During a temporary pilot program to see if a relief from the exemption would be successful in generating additional business, the Developer reports strong occupancy levels. . The airline contracts reinforce the Agency's three-diamond rating and require limited 24-hour room service and three hot meal services per day. . Hotel industry experts agree that entering into airline contracts are positive overall for maintaining hotel quality and provide built-in incentive to maintain standards. . Arguably, the exempted TOT is not a loss to City as this business would go elsewhere (ie: another hotel in the airport market area). . Providing the opportunity for exemptions for long-term transient contracts allows the hotel to compete on a regional basis. No other hotel in the northern Alameda County market area has a restriction such as that provided in the OP A. . Developer agrees to forego any further Agency payments totaling $113,702.