News for the Hospitality Executive
|By Tu-Uyen Tran, Grand Forks Herald, N.D.
Knight Ridder/Tribune Business News
Mar. 30, 2004 - Grand Forks' deal with Canad Inns of Winnipeg officially is settled after four years, two tries and countless legal drafts.
The City Council approved at a special session Monday night the final agreements.
Canad now can proceed with its plan to build a $35 million to $40 million hotel and entertainment complex next to the city-owned Alerus Center.
Canad chief Leo Ledohowski said he'll instruct his architect, Johnson Laffen Galloway, today to begin drawing detailed construction plans immediately. He said he's not sure when construction could begin but he's certain he would miss a prior deadline to open by December.
Ledohowski had hoped to have the hotel ready for hockey's World Junior Championship at that time. Now, he said, he'll have to make other plans to establish Canad's presence, plans he would describe only as "significant."
Council members voted unanimously and several expressed thanks to city negotiators, Canad and Mayor Mike Brown for, as Council President Hal Gershman said, "keeping the pot boiling."
Brown had made getting a hotel deal a priority because he, as many city leaders, believed a hotel would boost business at the Alerus Center and bring in more tax revenue for the city.
Monday night, he said that he felt "very relieved, excited and happy." After such a long time negotiating, he said, the final vote was a bit "anti-climactic."
And it certainly was compared to last year's brouhaha over the mayor's proposal to raise sales taxes 1 cent, most of which would pay for a water park next to the hotel. The plan drew fierce criticism, and voters overwhelmingly rejected it in October. Canad ended up having to build its own, smaller water park.
Canad chief Ledohowski made note of the four-year time frame Monday.
An earlier council had rejected a deal he proposed four years ago and when negotiations restarted in December 2002, they were divisive and lengthy, partly because of the water park issue. But Ledohowski hung on.
"I'm looking forward to being part of this community," he said Monday. "I hope we'll make good money on this, but there's more to it than just money. Some things just feel right, and this feels right."
The final deal calls for a 192-room hotel, a water park and a cinema. Canad would pave 4.7 acres of land to expand the Alerus Center parking lot. Altogether, the deal is worth an estimated $1.3 million to $1.7 million to the city, most of it in the form of additional taxes.
From the city, Canad would get a five-year abatement on property tax on its buildings, virtually free land and an estimated $1.1 million to $1.5 million community-marketing fund. The deal would give Canad about $7.2 million in benefits.
Taxpayers would pay for only the marketing fund. The rest of the benefits are from the tax abatement and land.
Most of this had been previously agreed to in principle. Monday night's discussions focused on parking considerations. Canad, instead of getting a dedicated parking lot, would share everything with the city, though it could request temporary dedicated parking at a later date.
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(c) 2004, Grand Forks Herald, N.D. Distributed by Knight Ridder/Tribune Business News.