BRIGHAM CITY -- The city's efforts to obtain federal funds to entice businesses to the downtown Academy Square project has some existing businessmen complaining about unfair competition.
"I was shocked," restaurant owner Steve Maddox said of his reaction when he heard the city was pursuing a $1 million federal interest-free loan to help as yet unspecified developers.
He told the city council Thursday that he's happy to see new businesses - "if I can't compete, I don't deserve to be in business," he said. But, "I'm pledged to justice, and inherent in that is the freedom to compete and earn the respect of customers. Also inherent is that the competitor plays by rules that are reasonably similar, and how can we compete against interest-free money?"
The council signed off on the efforts by city staffers to apply for the $1 million loan from the U.S. Department of Agriculture that will help bring a high-quality hotel to the city's downtown. The ambitious Academy Square project -- centered around the 1904 building that once housed a dance and music academy -- envisions a community center and plaza. It would feature a new business
-class hotel and possibly a restaurant, though the million-dollar loan will go only toward a hotel, said Paul Larsen, Brigham City's economic and development director.
Tim Haderlie, manager of the Crystal Inn, echoed Maddox's statement that the city proposal was unfair.
"I'm all for competition," he said, "but this creates rough water for those already in business."
He said the city should use federal incentives to bring people to the Brigham City area, explaining that businesses such as hotels and eateries "ride the tide" of additional customers rather than creating the increase.
Haderlie said occupancy at the Crystal Inn remains down, with 54 percent occupancy this year, compared with 67 percent occupancy last year. He added that the anticipation the LDS temple open house would bring in additional tourist money proved unfounded.
Still, city studies and anecdotal evidence suggest a high-quality business-style hotel is needed in Brigham City, Larsen said.
"There just isn't the kind of hotel" that large Box Elder County employers "want their travelers to stay in," he said. Most employers lodge visitors outside of the county, he added.
"It's not that we're trying to push out or harm any local businesses," said Larsen. "But we feel there's capacity in the economy to have good activity for everyone."
The temple open house brought in hundreds of thousands of day-trippers, but Larsen anticipates once the temple is functioning normally, local businesses will benefit from events such as weddings that will bring people into the area to stay and eat in Brigham City.
Council member Ruth Jensen was the sole nay vote on the proposal to obtain the loan, which will pass through the city right to the developer.
"If it's such a good idea, why doesn't the free market do it on its own?" she asked.
Larsen explained that the bulk of financing for what is anticipated to be a $5 million hotel will come from bank financing and other sources.