FREQUENTLY ASKED QUESTIONS ABOUT THE HOLDREGE HOTEL PROJECT
Sunday, April 01, 2018
1) DOES HOLDREGE REALLY NEED ANOTHER HOTEL?
A 2015 market study conducted by Core Distinction, a leading hospitality industry research group, determined that Holdrege could indeed support a third hotel. The comprehensive research document measured not only Holdrege but also neighboring markets to determine existing and potential lodging demand.
The 2015 market study also included a business pro forma. The project was re-opened in late 2016 when PCDC staff determined sufficient interest existed from qualified investment partners and multiple hotel brands. The pro forma was then updated in 2017, which confirmed viability.
Developers and investors make their own decisions about risking capital. PCDC acts as a facilitating partner to assist quality projects and does not act as a gatekeeper to prevent new operations from considering the community.
2) WILL ANOTHER HOTEL DAMAGE EXISTING HOTEL PROPERTIES?
The market study indicates that the new hotel will serve a new category of lodging customer in the Upper Mid-Tier Hotel Segment that often chooses options in neighboring markets.
Aggressive hotel development in neighboring markets has resulted in market growth rather than fragmentation. The study forecasts similar results in Holdrege.
New economic development in Holdrege will create additional demand for overnight stay options.
3) WHO IS PROPOSING AND DEVELOPING THE HOTEL PROJECT?
Holdrege Hotel Group LLC, a group of investors from the region will own and operate the proposed Cobblestone Hotel. The project will inject approximately $4.25 million of new investment into Holdrege and add about two-dozen new jobs.
4) WHY WAS THIS LOCATION SELECTED?
The 1.5-acre parcel fronts onto U.S Highway 183 between 8th Avenue and 9th Avenue, a high-traffic corridor with excellent visibility and attractive ingress-egress characteristics. The parcel is zoned Neighborhood Commercial like other areas of Highway 183, which permits hotel development.
PCDC purchased the entire site that had been home to the former Washington Elementary School from the City of Holdrege in order to actively recruit and facilitate development that would be compatible with the area and also meet the community’s strategic growth needs.
5) WHAT IS PCDC’S ROLE IN THIS PROJECT?
PCDC currently owns the property on which the hotel will be built, if the project moves forward. The developer has an option to purchase the property if and when all the pre-development issues are successfully addressed, including the approval of TIF.
PCDC has assisted the developer to navigate local regulatory issues as it does with other recruitment or expansion projects.
PCDC has assisted the developer to identify potential local investors and local banking partners to the project.
6) HOW LARGE WILL THE HOTEL STRUCTURE BE?
The property will be approximately 22,000 square feet on two floors. The footprint will be about 11,000 square feet on a lot that contains more than 70,000sf.
The design envisions 45 sleeping rooms with a lobby area, meeting room space for small groups, an exercise room and a breakfast-hospitality area.
There will be off-street parking for more than 50 cars. There is no accommodation for semi-trailer truck parking on-site, which will not be permitted.
7) WILL THE PROJECT APPLY FOR TAX INCREMENT FINANCING?
Tax Increment Financing (TIF) is an essential financing component for this project that supplements owner equity and bank loans. Without TIF the project will not move forward.
TIF will be used to finance construction of utilities and infrastructure, site preparation, parking and sidewalks among other qualifying elements.
The developer has requested only 85% of the new taxes generated, not the standard 100%, to ensure that all taxing jurisdictions receive a portion of the newly generated revenue. The property has never been on the tax roles before.
8) WILL 9TH AVENUE BE OPENED AS A THROUGH STREET?
The developer/owner has not requested that 9th Avenue be opened, only that the project is granted access to the property from U.S. 183 at that alignment.
During a review of the property legal descriptions it was discovered that 9th Avenue had not been vacated, which generated questions and discussion between City Administration and the project.
9) WHAT IS A COBBLESTONE HOTEL?
Cobblestone Hotels is a rapidly growing national chain that serves in the Upper Mid-Tier segment in competition with Holiday Inn Express and Hampton Inns.
The Cobblestone differentiator is that the company has developed a model to serve a void in smaller, more rural communities like Holdrege. Franchises like Holiday Inn Express focus on larger facilities – 90 plus rooms – in larger markets.
Cobblestone has built hotels in several comparable Nebraska markets: Broken Bow, Gering, Fairbury, McCook and Wayne among others. The company has nearly 100 hotels open or under construction in at least 18 states.
10) WHAT WILL BE DEVELOPED ON THE REMAINDER OF THE PROPERTY FACING BURLINGTON?
Both PCDC and the developer are actively seeking projects that will be a good fit but there is no firm plan in place for the northern portion of the former Washington School property where the tennis courts and soccer field were formerly located. Only Neighborhood Commercial zoned development will be constructed there.
11) HOW CAN I GET MORE INFORMATION? 308.995.4148
PCDC can answer many questions from neighbors or the public or connect them with the developer. Once preliminary financing and regulatory issues are resolved PCDC and the developer intend to conduct meetings with neighbors to share project information.