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Hotel-tax revenue helps to fill Tomball's coffers

The Residence Inn by Marriott broke ground Jan. 26 in Tomball, adding to the area's growing number of hotels and boosting the city's hotel-tax revenue.

Tomball's local hotel occupancy tax revenue is projected to be $550,000 in fiscal year 2015-16, which started Oct. 1, said Glenn Windsor, finance director with the city of Tomball.

That is a $78,000 boost from the $471,693 collected for fiscal year 2014-15, Windsor said.  "We have seen an increase since the Holiday Inn opened during the summer," Windsor said.

The 72-room Holiday Inn Express that opened last year on 14055 Park Drive in Tomball, along with business and population growth, is expected to help bring in more than $30,000 in additional revenue for the city this fiscal year.

The local hotel occupancy tax rate is 7 percent.

Hotel growth in northwest Houston is booming as large employers bring thousands of jobs and residents to the area, including Exxon Mobil, Southwestern Energy and Noble Energy's move to the 249 corridor. In addition, mobility improvements including the new Tomball Tollway and the Grand Parkway are driving more businesses, including hotels, to the region.

"At this time, Hampton Inn generates the largest amount of revenue," Windsor said.

The Hampton Inn & Suites is located on Medical Complex Drive in Tomball.

Area growth is driving up sales-tax revenue as well, which the city receives two months after it is collected at the local level.

This fiscal year, sales-tax revenue is projected to be $10.7 million. The city collected $3.36 million in sales tax from October through December, Windsor said.

"Our assumption is that the growth in the area since 2009 has increased both revenues," Windsor said.

Sales-tax revenue and hotel-tax revenue for the city are projected to continue to increase as growth projects are underway.

The Residence Inn is expected to open in Tomball in the fall of 2016.

And the city is planning to build Grand Parkway Town Center at the intersection of Texas 249 South, Boudreax Lane and the Grand Parkway, which will include a grocery store and other retail.

The Tomball City Council approved a strategic partnership agreement between the city and Municipal Utility District 273. The limited purpose annexation allows the city to collect 2-cents in sales-tax revenue from any businesses developed on that tract.

The sales-tax revenue for the first year of operation for the 153-acre tract is projected to generate about $18 million in sales, about $500,000 of which will go to the city each of the first five years, said City Manager George Shackelford.

After the first five years, the amount will shift with the city projected to receive about 25 percent more.

Houston-based NewQuest Properties has plans to develop the Grand Parkway Town Center on 63 acres of the 153-acre tract, which will include retail giant Sam's Club, other major retailers, and restaurants.

The Grand Parkway Town Center will include 187,010 square feet of retail space and 143,974 square feet of office buildings, which are expected to open in mid to late 2016.