October 18, 2009 - --Development of a hotel adjacent to Western Kentucky University is expected to move forward despite recent news that motel occupancy rates have dropped below 50 percent in Bowling Green.

August's occupancy rate dropped to 48.9 percent, down 7.23 percent from a year ago, according to Smith Travel Research.

"Chester Musselman is well aware of what the market is doing right now," said Mary Cohron of the Warren County Downtown Economic Development Authority. "So I don't think that (drop) is going to affect him. He is looking at a very specialized market for the hotel, being adjacent to the alumni center and meeting space."

WKU President Gary Ransdell said Musselman will be in town this week to meet with Ransdell and others involved in the development of the WKU alumni center and accompanying properties in the same block as the hotel.

The hotel will occupy a portion of what has become known as Block 12, which is encompassed by 13th Avenue, Center Street, 14th Avenue and Kentucky Street.

The parking garage will face Kentucky Street and have an entrance on 13th Avenue.

Ransdell said he is not familiar with the travel research numbers and isn't aware of what "due diligence" Musselman used in determining that he wanted to locate a Marriott Springhill Suites near campus.

"Yes, the university does generate a lot of hotel traffic and I would presume that a hotel next to campus would engage a pretty solid business," Ransdell said. "At the same time, I don't think it will detract from numbers of other hotels. ... That is only my sense."

Bowling Green Mayor Elaine Walker, who was against moving a downtown parking garage adjacent to WKU to attract the hotel, said that the hotel would be looking at a niche market different than that of hotels along Scottsville Road.

"Because of its closeness to campus, there will be that cushion that is not provided for another hotel," Walker said.

Some members of the Bowling Green Area Convention and Visitors Bureau last week questioned the feasibility of building new hotel rooms in Bowling Green.

Now there is one hotel under construction, Country Inn and Suites, that is expected to open in January, adding another 70 rooms to the market, according to Vicki Fitch, executive director of the CVB. There currently are 2,556 rooms in Bowling Green. Musselman's hotel would add another 100.

But when large events come to down, hotel rooms are used throughout the region. When the CVB tried to help land a Senior PGA event for Bowling Green tournament organizers wanted to be able to see 4,500 available rooms.

According to Smith Travel Research there are about 4,200 rooms in Bowling Green, Cave City, Franklin, Glasgow, Park City, Russellville, Lucas and Scottsville. For all those rooms, the August occupancy rate was estimated at 48 percent, compared to 52.5 percent in 2008 and 59.7 percent in 2007, the research firm said. The annual occupancy rate for the region in 2008 was 50 percent, down from 53 percent in 2007.

Kevin Brooks, attorney for the downtown corporation, said Musselman is working on finalizing the project.

"He is well into getting his financing," Brooks said. "But it is purely a private thing, so at some point it becomes none of our business."

Ross Tarrant Architects of Lexington will be designing the parking garage to have an urban feel that will fall within the Tax Incremental District design guidelines, Brooks said.

The architecture firm has designed numerous school projects in the area and is working on the Southern Kentucky Performing Arts Center. It also will design the alumni center and meeting space that will be combined.

The garage will be paid for with about $5.5 million in New Market Tax Credits that are expected to be available by the end of the month or first of November.

A second batch of tax credits of $6 million to $7 million will be available a month or so after that. The funding will pay for infrastructure development on the block such as storm sewers and will reimburse Western Kentucky University Foundation for purchasing the properties. It also will pay for construction of 6,000 or so square feet of meeting space.

"There are a very few small details that I'm confident will work out on the property acquisition," Brooks said. "And if we do, we will acquire all of that in the matter of the next week or two."

Brooks said he hopes construction of the garage could begin by the end of the year.

"I'm certain by this time next year we will have a garage," he said.

The design of the new WKU alumni center and adjacent meeting space, which will be owned by the downtown corporation, and the hotel is expected to take longer.

Ransdell said about $2 million has been raised privately by the WKU Alumni Association for the new alumni center.

Director Donald Smith said they will conduct a campaign to raise more funding to help make lease payments for a 10-year period and hopefully enough extra funding to establish an endowment.

Ransdell said WKU also has committed to leasing space for a bookstore, market concept and coffee shop that will be on the ground floor of the parking garage.

"We also are looking at the possibility of locating our police station there," Ransdell said.

Ransdell said the retail space will complement WKU's plans to develop housing on the other side of 15th Avenue. Design work has begun on that project, which is about 18 months from breaking ground.

Ransdell said this will be the second time for him to meet Musselman. The other time was about five weeks ago.

"His resolve was strong and firm then," Ransdell said. "But he couldn't be absolute because of the uncertainty of how the city would react to moving the parking garage. He said if they would act, he would move promptly and that's why he is coming back.

"... I look forward to getting the formalities in place to ensure the hotel is on its way," Ransdell said. "I have no reason to believe it's not, but I will feel better when the paperwork is signed."

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