New Braunfels City Council approved a resolution tying economic incentives to the historic Faust Hotel, located at 240 S. Seguin Ave., during a March 9 meeting.
The agreement with the hotel will provide a hotel occupancy tax, or HOT, rebate to support the ongoing renovation at the hotel in downtown New Braunfels, according to agenda documents.
The details
HOT funds typically go toward promoting tourism and events and are collected by state and local government agencies, according to the Texas Comptroller’s office website.
The Chapter 380 Economic Development Program would rebate 100% of HOT generated by the hotel for five years or $1 million, whichever comes first, Deputy City Manager Jordan Matney said.
The program, authorized by the Texas Local Government Code, allows loans or grants of public funds—such as HOT funds—to incentivize economic development, according to the city’s website.
The agreement would promote local economic development, stimulate commercial activity, increase the property's taxable value and preserve a historically significant building in the city's downtown core, Matney said.
“This building is tremendously important to our downtown, so we're really thankful that this has become a project that they are dedicated to preserving the building and restoring it to its original glory,” Matney said.
The local impact
The property is expected to add $10 million in new value and generate an estimated $2 million in HOT over 10 years, along with associated sales and property tax revenue. The average nightly hotel rate is projected at $250, compared to the citywide average of $111 in 2024, according to the meeting presentation.
The original renovation budget was set at $7 million, but the project expanded significantly beyond initial projections, according to agenda documents. Additional work undertaken by the owner included a complete replacement of electrical infrastructure, replacement of the sewer main and full restoration of the historic exterior windows, Matney said.
Something to note
The Faust Hotel is expected to reopen in May, Faust Hotel owner Andy Duettra said.
