Developer cites tariffs, inflation in request for DeKalb city to help pay to build hotel

A hotelier is asking for DeKalb city financial aid to construct a four-story, Marriott-branded hotel, blaming “current economic conditions, tariffs and inflation” for increasing his cost to build, documents show.

Pramit Patel, doing business as Peace Road Hotels LLC, received permission from the DeKalb City Council last fall to build TownePlace Suites and Fairfield Inn Hotel on 2.5 acres at 902 Peace Road. Plans show the hotel would hold 120 rooms, 61 as standard stay and 59 for extended-stay customers.

With permits in hand, Patel is ready to build. But he approached the city recently to help offset what city staff said is about $4 million in extra costs.

City officials said the current financial climate has increased Patel’s construction costs to about $23.2 million, according to documents released ahead of Monday’s DeKalb City Council meeting.

Shopping anxiety surrounding tariffs imposed by President Donald Trump on goods coming from countries across the world, including many U.S. allies, took hold this month, The Associated Press reported.

Retail sales rose a solid 0.5% last month from the previous month, and June spending was stronger than expected, according to the U.S. Commerce Department’s report released Aug. 15. June’s retail sales were revised upward to 0.9% from the original 0.6% increase, the agency said. The pace in July matched economists’ estimates. Excluding auto sales, which have been volatile since Trump imposed tariffs on many foreign-made cars, retail sales rose 0.3% in July.

Another government report, issued Aug. 12, on U.S. inflation showed that inflation was unchanged in July as rising prices for some imported goods were offset by declining gas and grocery prices, leaving overall prices modestly higher than a year ago, The AP reported. U.S. wholesale inflation, however, surged in July, signaling Trump’s tariffs on imported goods are pushing costs up.

On Friday, Canadian Prime Minister Mark Carney announced Canada is dropping many of its retaliatory tariffs to match U.S. tariff exemptions for goods covered under the United States-Mexico-Canada trade pact. U.S. imports from the two countries include items such as agricultural goods, alcohol, auto parts, electronics and wholesale building materials including steel and textiles, according to the Commerce Department’s International Trade Administration.

The financial aid consideration is one of the only items listed on the short agenda for Monday’s City Council meeting, set to start at 6 p.m. in the Yusunas Room of the DeKalb Public Library, 309 Oak St.

City staff have presented multiple options for the council to consider, documents show.

One would work with the DeKalb County Enterprise Zone, an economic tool administered by the state and locally by the DeKalb County Economic Development Corporation to incentivize area business growth. City staff said the hotel project has not been granted a local property tax abatement, but qualifies for a sales tax abatement on building material costs.

Another option offered by Patel would be in the form of a hotel tax rebate, documents show.

The council on Monday will consider a tax sharing agreement with the hotelier, a way to offset costs in the longer term.

Under Patel’s proposal, the city would share the hotel-motel tax generated by customer bookings for the next decade.

The agreement, if approved, would be limited to 10 years or $2 million, documents show. The city would distribute its share of the tax collected from revenue generated only at the Peace Road property.

The tax agreement would be contingent on the hotel remaining in the city limits, documents show. If the hotel were to close, the agreement would be terminated, and Patel would be required to pay the city the total amount of tax owed.

No vote is expected Monday, although the council could vote on a resolution for the financial aid offer by Sept. 8 if members are amenable to the plan, documents show.

• The Associated Press contributed to this story.