Marion search for lodging option continues

When the Marion City Council unanimously approved a $7,000 feasibility study five months ago, the plan was to see if the town could support a hotel/motel at Batt Industrial Park.

But before the final draft of the feasibility study was presented, the developer backed out.

Terry Jones, economic development director for the city, said based on misleading information by a local news source, the companies involved decided to drop the project in Marion.

The concern, Jones said, was expressed by the developer, Tim Shefchik, vice-president of development with Brimark Buildings.

Jones said Shefchik told him the hotel company and developer no longer believed the project would have the community support and investor relations necessary for success because of the negative publicity in July.

Even though this developer and the Cobblestone Hotel chain chose not to build in Marion, Jones said the project will continue to move forward using the information from the study.

?Efforts will now shift focus to again finding an interested developer,? he said.

Background

Bringing a 31-bed hotel was a positive step foward for the city, Jones said, which is why the search for other companies and investors is still on the table.

Prior to Jones contacting the developer and hotel chain though, he said he searched for companies that did feasibility studies.

The preliminary study indicated the project could work, and that?s when Jones said he spoke with Shefchik, a company specializing in partnerships not only with Cobblestone, but also Americ?Inn, Comfort Inn & Suites, Baymont Inn & Suites and others.

?I talked quite a bit to Tim and we started putting things together,? he said. ?If we were to move forward with this project, a feasibility study was needed.?

In their discussions, Shef?chik suggested Core Distinction Group. Jones said it was one of the less expensive, but that content was good if not better than some of the other companies he researched.

Feasibility study

Lisa Pennau with Core Distinction Group LLC in Peoria/Phoenix, Ariz., talked about why towns benefit from having a feasibility study and specifically if Marion could support a hotel or motel.

As part of the study, she said, community members in Marion were interviewed and were in favor of supporting growth.

?In our opinion, lack of support can be determental, and in order for any new development to be successful, local support is crucial to a project?s success,? she said.

In the case of Marion, the feasibility study identified if building a hotel would be a good idea in that market.

?We take many factors into consideration when completing our reporting,? she said.

?Those include visiting the community, touring the community and surrounding area, in-person interviews with city leaders or major employers, phone interviews, census data, hotel trend data, online research and more.?

One of the most valuable pieces of the group?s research is the community and major employer interviews that Pennau said help them identify local support of a project.

?When we interview locally, we ask where the potential hotel guests are staying now,? she said.

?These are the individuals we?re looking to identify,.?

If they stay in a newer branded hotel, the result would be keeping those dollars, which in this case would be Marion.

?By staying local, fueling up, eating at restaurants and shopping at available retail would further stimulating economic growth,? she said.

?We are not looking for the local motels in town to be impacted negatively. Rather we?re looking for those answers that indicate the guest is not staying local and that they?ve moved to lodging outside of the community.?

Other benefits

The feasibility study can also be used to support other local economic growth and development, Pennau said.

Other developers could use the study to support and promote the city because the document was written to highlight the benefits of developing in Marion.

As for building a hotel, some of the most important factors are demographics, restaurants, major highways/traffic patterns, demand generators or attractions, events and local need.

?These items were listed to appeal to a hotel developer, yet this information is also important to other developers such as grocery, retail, restaurant, housing or general community development,? she added.

SOP

Oftentimes a feasibility study is required by a bank or investor.

?The financial projections provided in the document indicate returns on investment for those groups,? she said.

?This document indicates projected revenue, expenses and returns for the first full year, open up to five years.?

Also in the study is a break-even page, Pennau said, which indicates how the hotel would need to preform to break even and not lose money.

?In most cases someone investing this amount of money into a project wants to understand their risk and potential for growth on their investment as well. This document provides that clarification.?

Jones added that part of selling point for the city was the information within the study.

?This document is something to show to other people and businesses. It encompassed a lot of information, which has value outside of a hotel.?

Jones said another positive about the study was that halfway through it, the city was given the option to continue or stop.

If the city determined to stop the study, the cost would be $3,500 rather than $7,000, he said.

Recommendations

A 31-bed hotel was the recommendation, but Jones said he didn?t get far enough into it to talk about amenities.

?The feasibility study said the hotel should just be rooms,? he said.

?The developer (Tim Shef?chik) and I talked about partnerships in the community to include a nightly rate for guests getting a free pass to the pool, but with the hotel paying for that.?

The same was discussed with meeting space and groups coming in needing a room for large or small gatherings.

Even though the $7,000 was paid by the city, the idea was that with the land sale part, the city would charge $7,000 more to get the cost back, Jones said.

With the feasibility study favorable to a hotel, the plan was to have 40 to 50 percent be local investors, which would decrease initial expenses.

?By having local investors,? Jones said, ?it means the community is invested and behind it and supporting it.?

Probably the biggest benefit of the hotel would be that half the money spent at the hotel would stay in town with the other half going back to the hotel company, he said.

Those interested in viewing the study or wanting more information can reach Jones at 620-382-3703.

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