|By Shannan Bowen, Star-News, Wilmington,
N.C.McClatchy-Tribune Regional News
Sept. 28, 2011--Some local hotel owners assert that their businesses have been hurt by competing with two hotels purchased with Carolina Beach taxpayer dollars and owned by a nonprofit created by the town.
But the town's nonprofit, CBP3 Inc., took steps Tuesday afternoon to level the playing field by deciding to accept proposals from any management firm or hotel owner interested in operating the Guy Johnson Motel and the Surfside Motor Lodge.
Steve Coggins, the towns attorney, will draft a request for proposals this week that will include contract terms such as the number of years the town will lease the properties and requirements to upgrade the facilities, which are said to be in bad shape.
Successful bidders also will likely pay more than the $57,000 annual management fee paid by Village Realty & Management Service Inc., an Outer Banks-based firm that has managed the two hotels since the town created CBP3 Inc. almost two years ago to purchase $4.3 million in property, including the hotels, from a defunct development group.
The town pays debt service on the property, which is supposed to become the site of a fishing pier built and operated by the N.C. Aquariums division. The state has yet to sign an agreement to build the pier because of budgetary restraints.
David Pierce, owner of Drifter's Reef Motel on Lake Park Boulevard in Carolina Beach, said it wasn't fair that he and others didn't have a chance to bid on a management contract for hotels purchased with public money.
Other hoteliers never had a chance to submit proposals to operate the two hotels when they were purchased almost two years ago, because Village Realty's contract was allowed to continue, Town Manager Tim Owens said.
But Pierce said $57,000 was a low management fee that allowed the management firm for those hotels to charge less for rooms, undercutting other lodging businesses in the area.
"If your fixed costs are low, naturally you can sell (hotel rooms) cheaper," said Pierce, who attended Tuesday's CBP3 meeting.
David Bowles, owner of Dolphin Lane Motel in Carolina Beach, also attended the meeting, and both hoteliers expressed interest in submitting proposals to manage the hotels.
Bidders will be required to have experience in hotel management or ownership, and they must submit ideas for upgrades to the two hotels, the nonprofit's board of directors decided Tuesday.
Owens said the properties' exteriors needed improvements, and others said they've only heard rumors and complaints from visitors about issues with the hotels.
"It's a resort property, and it's being used for non-resort purposes," said Councilman Dan Wilcox, who is the unpaid president of the nonprofit's board.
Greg Reynolds, assistant director for the Pleasure Island Chamber of Commerce and a director for CBP3, said the chamber has received complaints about the state of the properties.
But neither Owens nor any of the board's directors knew specifically what upgrades were needed at the hotels. So, Owens, the town's attorney and CBP3's board of directors will visit the hotels Thursday morning.
Prospective managers will pitch to the board their ideas for upgrading the hotels, and Wilcox said the board will select a manager based on "best value."
Owens said qualifications will include the company's reputation, financial stability, upgrades they're willing to make and how long they have been in business, among other factors.
Also, the goal is to receive more money to pay off the debt on the property, he said.
The manager also must be willing to face the unknown with the N.C. Aquarium pier project.
Contract terms, outlined in the request for proposals that the town's attorney is writing, will mention the town's authority to kick out a manager with several months' warning if the town or state receives grants to move forward with building a pier, park, parking lot or any other option officials decide for the property.
But even town officials don't yet have the answers to questions about the future of the pier project, and they hope to get some when town representatives meet with state leaders next month.
Shannan Bowen: 343-2016
On Twitter: @shanbow
(c)2011 the Star-News (Wilmington, N.C.)
Visit the Star-News (Wilmington, N.C.) at www.starnewsonline.com
Distributed by MCT Information Services