Dec. 2--Two hotel projects that have been on hold since July 21 remain in a holding pattern.

The Tax Increment Reinvestment Zone board of directors did not take action on the proposed Hampton Inn and Marriott Hotel projects Monday afternoon because of a "gray area" concerning City Council member Mac Woodward.

TIRZ board chairman Wayne Barrett said the two projects could return to the agenda later in December if the legal matter is cleared up.

The two hotels would be constructed on land on the west side of Interstate 45 between Raven Nest Golf Course and Smither Drive.

Board members attending the meeting were Danny Pierce, Dalene Zender, Robert Autery, David Moorman and Richard Montgomery.

The two hotel proposals were scheduled to be brought before the TIRZ board at its July 21 meeting, but directors voted to table any action on them when it was learned that Woodward had an interest in 8.7 acres in the property where developers are wanting to build the hotels.

According to a provision in the state tax code, TIRZ directors and City Council members cannot have any interest in property being considered for financial assistance to construct public infrastructure or is eligible for tax abatement.

Two days later Woodward submitted a proposal to give his portion of the land to the city with the net proceeds he would have received go toward the Huntsville Public Library.

The city rejected the proposal.

At the July 29 City Council meeting, Woodward said he had deeded the property he owns in the TIRZ to his grown children on July 25.

Woodward said he deeded the property to his children, "but I retained the same proposal that I had made with the library."

"If and when that property, 8.7 acres, is sold then the proceeds of that sale on my original interest will go to the library," Woodward said at the time. "It has nothing to do with the TIRZ, it is not tied to the TIRZ or anything else."

City attorney Thomas Leeper said following Monday afternoon's meeting that "there's some concern that there was a reservation of where the proceeds from the sale would go" and Woodward designated the proceeds go to the public library.

Leeper said the gray area was that he was unable to determine if the designation was legal or illegal.

"The question is whether that is a retention of a level of control that would still create a problem with the statute," Leeper said.

Barrett, who was attending his first TIRZ meeting as chairman, said, "We didn't take action because a number of us thought this question of ownership about the land had been taken care of, but then in consulting with Thomas today, our city attorney, he just indicated to me there was a gray area there.

"He couldn't say that unequivocally that this would be a legal thing for the (city) council to do. I think without that sort of assurance, and we are not attorneys, so if your expert advice tells you there's some question about it, you need to question yourself if you go forward with it."

Barrett said Woodward's designation of where proceeds from sale of the land will go "apparently raises a question legally if he is legally an owner in any sense of the word or not."

"Everybody has their own reaction to that and their own opinion about it, but the question we have to deal with first of all is it legal," Barrett said. "Our attorney was unable to give it a clean bill of health whether it would be a legal action on the part of the council, so that held us up.

"If that was cleared up, we would have talked about those two proposals tonight and we're anxious to talk about it because they have been out there for some time. I am going to be hopeful that in the near future there will be a solution for this issue and we will be able to go forward."

Barrett said the two hotels could return to the TIRZ agenda later this month.

"If there has been no change in the legal disposition of the property, then I don't know if we can do anything until there is, but we're hoping something can happen soon so that we can go forward," he said.

Barrett said if the developers own the property the issue is non-existent.

"The board would have to look at the proposals and make a recommendation or not and then the council would have to act on that recommendation," he said. "None of that is a given, but at the same time we can't get to that point until this legal issue is resolved."

Barrett said Woodward has tried to clear the legal issue "and thinks it is all taken care of and a lot of us did.

"He will probably be surprised to hear this too, but at the same time, I feel like the TIRZ board is just responding to the legal counsel we have been given ... that there wouldn't be any legal issues with it."

City manager Bill Baine said Monday he talked with engineers for both hotels in September, telling them because of the legal issue he doubted if the city or county would be contributing any money toward the public infrastructure.

Baine said the hotels would have $1.6 million invested in public infrastructure and

"they want less than $600,000 back."

The two hotels would be valued from $10 million to $11 million.

"I thought it was unethical for me to proceed with them thinking in their negotiations with the owners that it was unethical for me to let them leave thinking they were going to get money from the city or the county," Baine said.

Baine said the two hotels are continuing with their plans with each having at least $100,000 invested in the projects.

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