NYC officials and community advocates are raising concerns over government-backed financing for a proposed boutique hotel in Williamsburg, questioning the economic benefit it would bring to the neighborhood.

Brooklyn developer Two Trees Management Co. is applying for $15 million in federal tax-exempt financing to build the hotel on an 11,105-square-foot parcel of land on Wythe Avenue in an industrial area of Williamsburg.

The New York City Capital Resource Corp., a local development corporation controlled by Mayor Michael Bloomberg, is holding a hearing on the project Thursday and will vote whether to approve the Williamsburg hotel for financing next Tuesday.

“I’m not sure subsidizing a boutique hotel in Williamsburg is the best use of resources right now,” said Bettina Damiani, project director at Good Jobs New York, a nonprofit that scrutinizes the city’s economic development projects.

Ms. Damiani said the hotel’s proposed location is in an area that the city has designated for the preservation of manufacturing and industrial jobs. There are also concerns about the quality of jobs the hotel would produce, she said.

Jed Walentas, principal at Two Trees Management, said that there were no other industrial businesses competing to buy the building when his company purchased the property. “I disagree that a hotel is not a productive thing to have there,” he said. “I think a hotel is an amazingly complimentary use.”

In June, the New York City Capital Resource board gave the green light to award nearly $20 million in federal tax-exempt financing to a proposed Harlem hotel and retail-project backed by former football star Emmitt Smith.

But recently, city officials have been concerned whether Mr. Smith’s group would be able to meet a year-end deadline to remain eligible for the $20 million of federally backed financing.

The 73-room hotel in Williamsburg is one of two alternative projects that the city is considering for the financing. The other is a proposed film-production studio on Kingsland Avenue in Brooklyn.

According to Two Trees Management’s application, the Williamsburg project would create 75 construction jobs and 195 full-time equivalent permanent jobs. But an analysis conducted by the New York City Capital Resource concluded that the project would only produce 53 new construction jobs and 33 permanent jobs.
“They had a vastly overstated claim of job creation,” said City Comptroller John Liu. “We need to end that practice.”

But Mr. Walentas stood by his figures. “We had professional people put our numbers together. I know they are wrong on the construction jobs,” he said.

(Source: Wall Street Journal)