|By Courtney Crauthers, The Edmond Sun,
Okla.McClatchy-Tribune Regional News
December 17, 2008 - EDMOND -- PKF Consulting recommended the development site owned by Bayer Properties at I-35 and 15th Street for the proposed hotel and conference center after completing an analysis of the market support and the financial projections for the project. Bayer Properties is competing with the Covell I-35 group, which wants to include the project in their shopping center at Covell and Interstate 35.
"We felt (Bayer Properties') development plans were further along," PKF president Mark Woodworth said at an Edmond Economic Development Authority and City Council workshop Tuesday.
He said the overall development at that interstate exchange also is more developed with a Wal-Mart Supercenter. That combined with the proximity to Arcadia Lake creates moderate traffic volume, PKF stated in a draft of their results.
The hotel component of the project is estimated to cost $36.7 million, Woodworth said. PKF recommended a three to three-and-a-half star full-service hotel with 200 rooms.
The conference center component of the project is estimated to cost $14.3 million. PKF recommended a gross total of 44,000 square feet, which includes 22,000 net usable square feet of meeting space.
The project is expected to be a member of the International Association of Conference Centers.
The total cost of the project is projected at about $51 million. PKF recommends that it be a public-private venture.
"There's really nothing like what we're looking at that exists in Edmond today," Woodworth said. "I don't know a single full-service hotel that makes economic sense on a stand alone basis. We do know that when communities, such as Edmond, pursue these types of projects, there is some level of community participation."
Woodworth said his firm's study shows that the people that would utilize the facility are getting their needs met by staying in full-service hotels in downtown Oklahoma City. According to a convenience survey PKF conducted, four out of 10 people they surveyed had attended a meeting in Edmond. Of those surveyed, 73 percent said they had not thought of Edmond as a place to hold a large meeting because there was not a facility to accommodate their needs.
Cathy Williams-White, director of the Edmond Convention & Visitors Bureau, said the facility would not take business away from other local hotels, but enhance them since people could stay at any hotel they wanted and still utilize the conference center. She said Edmond currently has 682 rooms to offer visitors with a few hundred already under construction.
While Woodworth said there is an opportunity to create a hotel and conference facility, there is a projected shortfall between the cost of construction and incoming revenue during a 10-year period.
Woodworth said they predict a $3.2 million gap between the construction of the hotel and the revenue it would bring in and a $6 million gap between the construction of the conference center and the revenue it would bring in over the course of 10 years. The total shortfall would be about $9.2 million.
Mary Ann Karns, EEDA chairwoman, said she previously asked city staff to calculate an estimate on what the sales tax on construction would be and what the sales and room tax would be during this same 10-year period. She said they expect to see about $1.5 million from sales tax on construction and about $9 million from sales and room tax.
"We understand financing is going to be an issue," Karns said.
She said it is too early to determine how they are going to finance the rest of the shortfall and other expenses, including land acquisition.
"We're opening up a market that doesn't exist in this community," said Hardy Watkins, executive director of the Oklahoma Tourism and Recreation Department. "The challenge becomes the public investment. Something like this isn't happening without some level of public support."
Watkins said there are a lot of unknowns and someone needs to sit down and talk with the developers of both sites.
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