News for the Hospitality Executive
|by Pat Ferrier,
Despite a prolonged economic downturn, hopes to one day have a hotel and conference center in Old Town Fort Collins live on.
The next step for the long sought
after hotel in the heart of the city hinges on whether the Fort Collins
City Council and Downtown Development Authority board of directors can
find common ground.
The two entities plan to have a joint meeting to discuss the city's financial role in the project and whether to push on with a request for proposals for the hotel knowing that economic times might halt forward progress.
The city's finance committee wants to pull the plug. City staff and the Downtown Development Authority board of directors want to go ahead and see what the request yields either way a decision needs to be made.
"Let's either go after it and make it
happen or say it's no longer our vision," City Manager Darin Atteberry
"From Day 1, I have always believed in the vision ... that a higher-end hotel would be fantastic for downtown and further brand Fort Collins," Atteberry said.
Though disappointed in the finance committee's desire to halt the project, Atteberry said he is hopeful a joint meeting between the DDA board and City Council will come out with a consistent approach to the hotel's future.
If the city does not take advantage of a fledgling rebound in the hospitality industry, it will lose what could be a strong economic driver for Old Town, said Nolan Rosall, president of RRC Associates, the consultant hired by the city to determine the feasibility of the hotel project.
Occupancy is improving, rates are inching up and when things are improving is the "best time to be coming in with a hotel," Rosall said. "There's a bit of a window we feel will close if the city and the development community are not able to take advantage of this opportunity and put it together relatively soon."Longtime coming
A downtown hotel has long been envisioned by the DDA and city leadership as an economic driver for downtown. They have been working on it for the better part of three decades.
DDA board chairwoman Wynne Odell said there is value in taking the next step and putting out a request for proposals "to give us an idea whether any of this makes sense given the time, place and conceptual design.
"From my perspective, it seems a little shortsighted to not finish the original intent," she said
There's no commitment that the DDA or city would respond positively to RFPs.
"It feels a little incomplete to me if we can't take it to the next step," Odell said.
Still, Odell admits they could send an RFP and not follow through with development.
"The last thing we want to do is misrepresent to potential developers that we're absolutely going for it and have them putting in time and effort to put together proposals then say, 'we didn't really mean it.'
"If we are able to go ahead with the RFP, how do we phrase it so we get people to submit proposals for a commitment we may not be prepared to make at this time?"
If the city passes on the opportunity, Rosall said a destination hotel like the one proposed in Fort Collins will go somewhere, including the I-25 corridor or Loveland, and the city will miss out.
"We have data that show the market is improving," he said. Construction costs are still low, contractors want to make a deal, hoteliers want to get going and the interest in putting something together is higher, Rosall said.
Calling it "a critical time," Rosall said there are a multitude of benefits that come from allowing the project to move forward.
Lake Forest, Ill.-based private equity real estate investment firm Green Courte Partners has amassed $13 million of key downtown real estate for a potential hotel.
Green Courte's Realtor, Eric Nichols of Doberstein Lemburg Commercial Inc., said Green Courte would love to build a hotel in Fort Collins, but the economics aren't right.
"Right now, you can't get a hotel developer to build anything in this city," Nichols said. "I've discussed this with top hotel developers who would love to build in downtown Fort Collins but the economics don't support it and you would never get a bank to back it at this time."
Without financial backing from the city, Nichols said it would be difficult to get anything going right now.
"The need for a hotel downtown is there, everyone understands that," he said. "But what kind of hotel?" In our dealings with the big hotel guys they're calling for limited service hotel. This market doesn't support the size of meeting space unless they (the city) wants to own it."
The amount of city investment is exactly the bone of contention with the city's finance committee.Economic times
The city and DDA have yearned for a downtown hotel for years and have come close at least twice.
In 1984, the DDA and city agreed to provide $6 million in financing toward a 200-room Radisson Hotel on a triangular block bordered by College Avenue, Pine Street and Jefferson.
The deal never materialized, but the same year saw the Fort Collins Marriott and the University Park Holiday Inn, now the Hilton Fort Collins, break ground on their projects.
It looked like the city would finally pull off a hotel in 2008 when it contracted with Corporex, a Kentucky-based hotel developer, to build a hotel and conference center on city-owned land on Remington Street.
The deal for the 150-room, nine-story project between East Oak and Olive streets hit the skids as the economy soured and banks clamped down on lending forcing major deals to fall through.
In August 2009, the DDA announced it was continuing its search for a hotel partner. It hired consultants to figure out what kind of product was needed downtown, identified several potential sites, including Remington Street, and is now at the point where it has to decide what's next.
Weitkunat said she does not support a downtown hotel because it places the taxpayers at a potential financial risk.
She said it was not the best answer if the idea is to increase the viability of downtown since Fort Collins is not a destination and a hotel would probably not be supported by people wanting to come for it."I expect the result from this joint meeting will be whether or not to continue pursuing it and send out the RFP and see what we get or just stop," Atteberry said. "A higher end boutique with conference space is a well-defined vision and preliminary data has shown that model can work."