Lawton Economic Development Authority deciding whether to give Lawton Lodging more time to recover costs

Lawton Economic Development Authority will weigh a decision in coming months to extend a tax rebate agreement with the entity operating the Hilton Garden Inn convention center.

LEDA members discussed the issue earlier this month, ultimately deciding they had time to weigh the factors before making a decision on extending the existing function space license agreement with Lawton Lodging LLC, operator of the convention center that is part of the downtown hotel. That agreement specifies a rebate on the hotel occupancy tax paid by customers when they rent a room, for a total collection of $3.5 million over a 10-year period, terminating when either goal is reached.

While that 10-year deadline is March 2024, LEDA is projecting Lawton Lodging will have collected about $2.5 million at that point. Lawton Lodging said it needs more time to recover its costs.

LEDA Chairman Fred Fitch said the agreement is important to the community because it is tied to a long-desired convention center.

“We looked at having a convention center for over 25 years,” Fitch said, of a project community leaders had explored without success before the dream became reality with the construction of Hilton Garden Inn as part of the downtown retail revitalization project.

Fitch said the Hilton Garden Inn project made sense — “we didn’t want to own it (the convention center)” — and it gives Lawton a convention center that was well used until the COVID-19 pandemic shut down many activities. The hotel industry is recovering from the shutdown, but revenues still aren’t what they need to be, Lawton Lodging officials said. So, as the 10-year deadline for recovering the $3.5 million approaches, Lawton Lodging wants a 10-year extension on its agreement, beginning in March 2024. The provisions would remain the same: the entity has 10 years to collect its money through the rebate agreement.

LEDA isn’t the only entity Lawton Lodging negotiated with to change the terms of financial agreements.

The entity also had an agreement with the Comanche County Industrial Development Authority for $3 million, and had paid back about half when it made a new agreement to exchange the rest of its debt for job credits. That agreement specified a 10-year commitment to remain in Lawton, said Fitch, who also is a member of CCIDA.

“They will be here whether we do this or not,” Fitch said of the LEDA agreement.

Lawton Lodging Manager Sam Kumar said in an April letter to LEDA that Lawton Lodging is losing money, as expenses continue to outpace revenues. While that difference has lessened, the revenue loss in 2022 still was $134,785 and “we cannot sustain and continue operating the convention center without the HOT (hotel occupancy tax) rebate program from LEDA.” That is especially true since Lawton Lodging is preparing to launch a renovation of its hotel within the next three years, Kumar said in his request.

While COVID-19 was a major factor, it wasn’t the only one.

When Hilton Garden Inn opened, military-associated customers received rooms for a discounted $55 a night, compared to the standard rate of $85-$90. While the rate paid has increased to $85-$90 per night, the cost of a room now is $120-$125. More importantly, the hotel also faced years of competition from an on-post hotel created by converting a set of barracks. Those rooms rent for less than rooms at Hilton Garden Inn and other hotels in Lawton.

“All hotels are dealing with that,” Fitch said, of an arrangement that has since been adjusted so people staying on installation pay a closer price to what they would pay downtown.

Despite mixed feelings about extending the agreement, Fitch said the convention center is important to Lawton.

“That’s a tremendous asset to us,” he said, explaining it is a magnet for smaller conventions that bring in 100-200 people whose organizers don’t necessarily want to pay the higher prices of facilities in larger cities. “We get a lot of those conventions.”

Ward 4 Councilman George Gill, who represents the council on LEDA, said the existing agreement has almost a year left, meaning LEDA members have time to weigh options before making a decision on Lawton Lodging’s request.