The Enid News and Eagle, Enid, OK

Local and State News

February 5, 2013

Commissioners hear plan for downtown hotel

ENID, Okla. — Enid city commissioners viewed a proposed development plan for a new downtown hotel in their regular meeting Tuesday night.

David Owen and Dave Mashburn, of LodgeWell LLC, of Overland Park, Kan., presented the city with a plan that calls for developing a 131-room hotel downtown in conjunction with the Enid Renaissance Project.

LodgeWell and the city of Enid entered a 120-day agreement in December to craft a plan for the new hotel, designed to be the final piece of the Renaissance plan.

Owen and Mashburn proposed developing the hotel with a team consisting of Lodgewell as the developer, along with Hood-Rich Architecture of Springfield, Mo., for architectural services, Timberlake Construction of Oklahoma City as the general contractor, and Matchline Design of Dallas for the interior design.

Commissioners were presented two location options for the new hotel: one to the west of Convention Hall, across Independence; and one with frontage along Maine and Independence in the location currently occupied by the Cherokee Strip Conference Center, the former Kress Building and Enid Convention and Visitors Bureau.

The former option would be a stand-alone hotel with a parking lot.

The latter option would entail demolishing the current conference center and interior of the Kress Building, then building a new hotel that would incorporate the facade of the Kress Building into the hotel structure. This option also would include construction of a parking garage along Maine east of the new hotel, possibly with ground floor retail space with street frontage.

Both plans specify a 131-room hotel to be opened under the Hilton Garden Inn brand.

Owen said his preference would be to develop the hotel on the east side of Independence, and incorporate the Kress Building facade, so the hotel would be co-located with Convention Hall and Enid Events Center.

Mashburn said incorporating the Kress Building facade into the new structure would offer the city “the best of both worlds.”

“Our thoughts are not to use the internals of the Kress Building, which is a wood structure, but to use the facade,” Mashburn said. “It allows us to have some of the historical character, but also get something new on the inside.”

Mashburn said preserving the Kress Building facade is important, both for Enid’s downtown heritage and for the unique appeal of the hotel.

“We wanted to keep that as part of the heritage of Enid, and we realize how important that is,” he said.

The new hotel would incorporate the Kress Building facade on its north end, and its main frontage space would be south of the existing Kress Building along Independence.

The hotel also would include space for Enid Convention and Visitors Bureau, and possibly a downtown Enid Police Department substation.

A roof garden would cover the footprint of the existing Kress Building on the hotel’s third floor to retain the Kress Building roof line.

Mashburn said one of the primary advantages of incorporating the Kress Building facade and constructing the parking garage would be the option for adding retail space on Maine.

“An important dynamic to a successful convention center and hotel is creating more of an attraction than just a convention center and hotel,” Mashburn said. “We hope this will spur more of that development downtown, and create more of that destination feel.”

Rickey Hayes, retail consultant for the city of Enid, said the added retail space would complement well the investments already made in Enid Renaissance Project.

“When you have the drawing power of the convention center and the built-in audience and the ambiance of the hospitality industry you’ve proposed here, it’s really a natural fit,” Hayes said.

Owen said the hotel development will carry a price tag of about $14 million, plus the cost of developing parking.

Parking cost estimates range from $800,000 to $3.5 million, depending on whether the hotel is built with a parking lot or a parking garage.

For finance purposes, LodgeWell is teaming up with D.A. Davidson and Co. to manage any public finance options, HVS Capital to manage private finance issues, and HWH Group to manage federal tax credit applications.

There is a possibility as much as 20 percent of the project could be funded by U.S. Treasury new market tax credits.

Charles Clayton, president of HWH Group, said Enid would be a good candidate for the new market tax credits because the city is defined by Treasury as a “highly distressed, non-metropolitan” area.

“If successful in securing an allocation of these credits to the project owner .... the bottom line is you can use about 20 percent of the project value,” Clayton said.

Owen presented the city commissioners with two options for ownership of the hotel.

“We are here to help you get this done, and we will do that in one of two ways,” Clayton said.

In one scenario, Owen said the city could own the hotel as a not-for-profit venture, finance its construction with bonds, and benefit from the hotel revenue after the bonds mature.

The other option would be a private enterprise venture in which LodgeWell would build, finance and operate the hotel.

Owen said LodgeWell would manage and operate the hotel in both scenarios.

“The city is not going to end up being the property manager of a hotel property,” Owen said.

Owen said LodgeWell is prepared to invest its own private capital to build and operate the hotel, if that’s the path selected by the city commissioners.

“We’re here prepared to invest $14 million in a hotel in Enid, Oklahoma,” Owen said. “How the rest of the structure goes together is really for you all to decide how to proceed.”

Owen said LodgeWell is prepared to invest its money in downtown Enid because of the investment Enid has made in itself with the Renaissance project.

“We were truly impressed by this community, and what you as a city government have done in your downtown project,” Owen said. “To see the brave and bold steps you’ve taken with Convention Hall and the Event Center is truly amazing. It is that project that gave us the confidence ... that this is something we should pursue.”

Enid City Manager Eric Benson told commissioners the LodgeWell proposal is the first proposal the city has received that met all of the city’s guidelines, and did not require a cash incentive or equity investment from the city.

“They are not seeking one dollar of equity from the city of Enid,” Benson said.

He said previous proposals filed with the city required the city to put as much as $7.4 million in cash equity to attract a developer, and the least amount required before LodgeWell was about $1 million.

Tuesday’s agenda item called only for a presentation of the proposed plan, and no action was taken.

Benson said he plans to bring the proposal back before commissioners in their next meeting to consider a master development agreement with LodgeWell, “along with all the attendant issues we discussed tonight.”

Those attendant issues likely will include the location of the hotel, selection of a parking option, ownership structure for the hotel and any funding sources, if needed.

Owen said a timeframe for completion of the hotel would be about 18 months after a development agreement is signed with the city.

The commission’s next meeting will be Feb. 21 due to the President’s Day holiday on Feb. 18.

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