|By Joe Mosley, The Register-Guard,
Eugene, Ore.McClatchy-Tribune Regional News
June 23, 2009 --The city of Eugene became a financial player on Monday in the development of a new "boutique" hotel at the Fifth Street Public Market.
Mayor Kitty Piercy and City Manager Jon Ruiz presented market owner Brian Obie with a check for $500,000 -- a five-year business development loan -- and expressed their support for the hotel project.
"In a sense, this investment is going to float a lot of boats," Piercy said. She said the loan will help get the project moving, creating construction jobs and, eventually, permanent jobs at the hotel.
The city money is expected to pay for engineering and architectural work, and the cost of shepherding the project through planning procedures.
With the loan, Obie said he has raised about $3 million for the hotel -- The Inn at the Market. It is projected to cost a little over $10 million.
He said that in normal times, he would proceed with an equity investment of 25 percent to 30 percent, or $2.5-$3 million. But, due to the slow economy and tight credit market, he wants to secure a total of at least $5 million in investment money before beginning construction -- ideally, next January, he said.
"We have many hurdles ahead of us," said Obie, a former Eugene mayor. "We feel like moving this project forward in this climate is like climbing a ladder. There are many rungs, and we're on about the first third of the ladder."
Obie announced his plans to build The Inn at the Market last December, by converting the now-vacant Nike Store and some adjacent space, and adding a fourth floor to the entire hotel footprint. The L-shaped structure also would extend southward into what is currently part of the Market's main parking lot, and would include a second-floor courtyard between the hotel and the LaVelle Wine Bar & Bistro.
Obie, Piercy and Ruiz said the business development loan is an example of how the city is trying to boost downtown development. The city also waives land use application fees for downtown projects, provides fast-track plan reviews and guarantees same-day building inspections.
According to city records, an application is pending for a conditional use permit to allow the hotel in a zone where it is not among the uses that are allowed outright. The application was scheduled for a public hearing in February, but the hearing was twice extended for 90 days -- most recently, on April 25.
The planned hotel was described Monday as including 66 to 69 guest rooms, with food service available from the Public Market's existing restaurants. Obie said efforts will be made to link the hotel's guests with the market's various merchants.
"It is a lifestyle experience that we're going to provide," he said.
Obie cringed at previous references to the hotel as "high-end," but acknowledged room rates will probably be set about 10 percent above those of the Eugene Hilton and Valley River Inn -- currently, the area's two most expensive hotels.
The Inn at the Market would be downtown Eugene's first new hotel since the 272-room Eugene Hilton was built in 1982.
But Obie said downtown is starved for more hotel space, and the conference center adjacent to the Hilton has lost some convention business because of the guest room shortage.
"The (conference) facilities are larger than the hotel space available," he said.
Ruiz, the city manager, described the hotel project as an "example of the kinds of things we're trying to do" to redevelop and inject life into the downtown area.
Piercy called the Fifth Street Public Market "a gem," and said the hotel will help tie together many of the successful elements of downtown.
"I think it will be a charming place for people to put themselves right down here in the middle of all this," Piercy said.
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