This Wichita suburb is discussing incentives for its only hotel

The Holiday Inn Express in Maize is getting a new ownership interest, and Raju Sheth is negotiating with the Maize City Council for incentives to partially cover the cost of an estimated $2.25 million in renovations.

Sheth, who owns a number of hotels, built the Holiday Inn Express in Maize in 2010, according to tax records and Maize City Manager Nick Gregory.

He later sold the property but is now purchasing an interest in it, Gregory said. It is not clear whether Sheth’s purchase of a controlling interest in the property has been finalized. According to the register of deeds office, the hotel has been owned by an entity called Maize Hotel LLC since 2024.

One thing is certain: Sheth, who could not be reached for comment on Tuesday, already is working with Maize to get incentives to help cover the cost of renovations that are necessary for the property to keep its affiliation with IHG, a multinational company that operates more than 7,000 properties worldwide.

In a show of support for Sheth and Maize’s only hotel property, the City Council gave preliminary approval to two types of incentives and the potential creation of an area called a community improvement district at its June 1 meeting. They are designed to help absorb some of the planned renovation expenses.

All of the incentives are subject to final approval as part of a formal development agreement between the hotel and the city.

One incentive would allow the hotel to forgo paying sales taxes on select renovation-related expenses through the issuing of sales-tax-only industrial revenue bonds.

Another incentive, which will face a public hearing on July 6, involves the creation of a community improvement district that, if the council later authorizes, would generate an extra 2% in sales tax for purchases made at the Holiday Inn Express. The City Council also gave preliminary approval to allocate 2% of all transient guest tax dollars to the hotel instead of being sent to the city to support tourism-related initiatives.

Maize authorizes an increase in transient guest tax

The council was not asked to approve the final development agreement with the hotel’s ownership entity that will be necessary for the hotel to receive those benefits.

Instead, the council was asked to approve what Gregory called preliminary actions that will keep the project moving forward while final negotiations continue.

In a separate but related action, the City Council approved an increase in the transient guest tax in Maize, raising it from 6 percent to 8 percent. If a final agreement is reached with owners of the Holiday Inn Express, the hotel property would get the extra 2 percent of tax collections. If such an agreement is not finalized, the city will keep all 8 percent of those tax proceeds.

Some council members asked how Maize’s new guest tax would stack up to those in surrounding communities. Wichita hotels charge a 6% guest tax and a 2.75% city tourism fee, and Goddard hotels charge a 9% guest tax, according to the Kansas Department of Revenue and information shared at the Maize City Council meeting.

Whether Maize ends up with 6% or 8% of guest tax dollars generated by the Holiday Inn Express, it will continue to use those proceeds for everything from putting on local events to other tourist-focused things, Gregory said during an interview with The Eagle.

In the past, the city used a portion of those proceeds to build the Clair Donnelly Amphitheater in Maize City Park, 401 S. Khedive, which opened in 2022. And part of those dollars may pay for events the city hosts, such as its Light the Sky Independence Day celebration on July 3, its fall festival, farmers markets and concerts.

Gregory told the City Council that he hopes to have the formal development agreement with the hotel ready for council action at its June 15 or July 6 meeting.

“All of these incentives are going to be tied to keeping (the IHG brand),” Gregory said. “It’s pretty crucial. It makes it competitive with some of the other hotels in Wichita. … Incentives would terminate if the property loses the required franchise designation. Renovations must be completed and the IHG requirement satisfied before incentives become effective. Delinquent taxes or guest tax payments could result in termination of those incentives.”