Jun. 3, 2004 - FRANKFORT, Ky. -- The Fletcher administration plans to recruit a private developer to build a large resort hotel on the grounds of the Kentucky Horse Park in Lexington.

If a deal is struck, construction could start next year.

The hotel complex would be the first commerically operated resort inside a Kentucky state park. Seventeen parks have state-owned lodges.

Commerce Secretary Jim Host said in an interview yesterday that a request for bids should be released soon, with a developer being chosen by the end of this year. No developer is favored at this time, Host said.

So far, the project is only in the planning stages. But Host said that revenues to the state from the venture could erase the Horse Park's $1.7 million annual operating deficit.

A professionally run hotel could also be just the start to making the park a more popular tourist attraction, Host said. Later, the park might add an IMAX movie theater, he said.

"This is a major development," Host said. "I have pushed it like the dickens. I think it's the key to turning things around out there."

Plans call for a hotel with at least 250 guest rooms, a conference center and a swimming pool, to be built on state land immediately west of the Horse Park entrance on Iron Works Pike.

Although details would be settled in the bidding process, the developer would have to pay the Horse Park at least $100,000 a year and an undetermined percentage of its revenue as part of its lease for the land, said John Nicholson, the park's executive director.

The Horse Park could receive up to $2 million a year directly from the deal, Nicholson said.

Host compared the proposed public-private partnership to the downtown Lexington Center. The Lexington Center Corp., a quasi-public agency, owns the land under the Hyatt Regency Lexington and gets six percent of the hotel's gross revenue through a lease. The hotel itself is owned by a private developer and managed by Hyatt.

Host, a former corporate executive who joined incoming Gov. Ernie Fletcher last winter, said his top priority is getting the state park system to turn a profit rather than lose about $29 million a year, as it currently does.

The Horse Park, which opened in 1978, had 913,000 visitors last year, hosted 64 horse shows and offered an historical exhibit on the role of horses in the British Empire. It's also national headquarters for 21 horse-related organizations with about 240 employees among them.

Yet the park only generated about $6 million last year through ticket sales and various fees. The state's General Fund had to make up the remaining $1.7 million of its budget.

The Horse Park should be a much bigger success given its close proximity to interstates 75 and 64 and the Bluegrass region's popular thoroughbred horse farms, some of which offer tours, Host said.

With an upscale hotel and other amenities added, he said, visitors would spend more time -- and money.

"There is a lot of vision and thought going into how we take that place -- that wonderful, scenic place -- and use it not only to help the community, but to help the (horse) industry," Host said. "We want to make it one of the top attractions in the United States, eventually."

Having a hotel on the grounds would help the Horse Park in its bid to host the 2010 World Equestrian Games, which is expected to draw 200,000 people over ten days, Nicholson said.

The games, held every four years, "is the equestrian Olympics, essentially," Nicholson said. "If it came to Lexington, it would be bigger than the Final Four."

Lexington already offers about 7,500 hotel rooms, with several major hotels -- Embassy Suites, Marriott's Griffin Gate Resort and Holiday Inn North -- at Interstate 75 and Newtown Pike, just a few miles from the Horse Park.

But there might be room for more. The city's average occupancy rate for hotels slowly has risen in recent years, from 58.7 percent in 2002 to 61.4 percent in 2003 to 61.9 percent projected for this year, said David Lord, president of the Lexington Convention and Visitors Bureau.

"Last year was the first time since 1998 that we beat the national occupancy rate, which was 59.2 percent," Lord said. "Our numbers have been trending in the right direction."

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