Mayor, city council vote to build hotel at Pope Center with $8.2 million guarantee

2010-08-12 / Front Page

By KIP BURKE news editor

The Washington City Council has voted to build a 61-room LaQuinta Inn adjacent to the Pope Center, with the city – and the city’s residents – guaranteeing the $8.2 million debt required to build it.

In Monday night’s meeting (August 9), the city council was strongly split on the wisdom of guaranteeing the hotel debt. District 2 Councilmen Ames Barnett, Pamela Eaton, and Edward Pope Jr. voted against the hotel project, while District One Councilmen Nathaniel Cullars, Marion Tutt Jr., and Kimberly Rainey voted in favor of the proposal. Mayor Willie Burns broke the tie in favor of moving forward with the hotel project.

Specifically, the vote authorizes letters of intent to be drawn up with developer Somata Group LLC and with Stafford Hospitality, the hotel’s operator, and instructs Ed Wall of Stern Agee to move forward with the bond counsel to initiate the issuance of $8.2 million in municipal revenue bonds.

Monday night’s vote came on a motion by Cullars to accept the recommendation by the Urban Redevelopment Authority. Last Thursday, the city’s Urban Redevelopment Authority voted 2-1 to recommend that the city council approve of the final hotel proposal, and URA Chairman Charles Jackson delivered the recommendation to the council Monday night.

Just as there were strong reservations about how successful such a hotel project would be, neither was the authority’s vote on Thursday unanimous. URA vice chairman Henry Harris said that he had kept an open mind through all the presentations, but after going over the final numbers, he said he couldn’t vote for it. “I’ve tried to make this work,” he said. “It’s a wonderful project, but the numbers just don’t work. Even if we filled it every weekend and 30 rooms during the week, we’d lose $300,000 a year. It just doesn’t he said.

At Monday night’s meeting, Councilman Barnett agreed with Harris. Referring to the 10-year figures generated by the developer and operator, he said, “You’re showing a loss even in year six. In year four, the principal payments are going to be $19,000 a month. Who’s going to make those payments? Is everybody going to start paying higher utility payments in year four? You show a $124,000 loss. Who’s going to pay?”

In answering Barnett, David Jenkins said that profit was not the only consideration. “This is not a business deal. This is an economic development effort to bring more jobs and tourism to town.”

After voting in favor of building the hotel, Councilman Tutt revealed his doubts. “I don’t think these numbers track very well either, but we’ve got to attract people here. I think we need it. I know what some people think, but from the bottom of my heart, this is not a political thing with me and the mayor or with Councilman Cullars or with nobody. This is something I chose to do myself, and this is a decision I’ll have to go down with whether it works or not.”

In meetings with the city, hotel developer Don French of the Somata Group LLC has said that once the hotel project was approved, ground could be broken within 30 days. The plan is to have the hotel complete and open in time for the tourism traffic associated with the Masters golf tournament in April 2011.

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