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Feasibility study examines community necessities

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News Worthington,Minnesota 56187
Daily Globe
Feasibility study examines community necessities
Worthington Minnesota 300 11th Street / P.O. Box 639 56187

WORTHINGTON -- Construction of the city's hotel and events center has already been postponed once, but it is hoped the events center feasibility study will give the Worthington City Council what it needs to set the project in motion.


"We sit on I-90. I am confident that as the economy improves, we'll move it very quickly," said Alderman Ron Wood.

"You have a very good corporate base here," agreed Stephen Sherf, president of Hospitality Consulting Group Inc., the company conducting the study.

Construction on the project was slated to begin last year, but was delayed because lending requirements became more stringent nationwide, affecting would-be developer Ruhr Development.

Council members questioned Sherf about the scope of the study, asking if it would also examine the feasibility of a restaurant, attached or unattached, on the events center property.

"A lot of hotels don't have restaurants because they're not profitable," Sherf said. "The situation here is you're going to be providing the banquet space to this hotel operator at this reasonable cost, so I would hope they would be able to support a restaurant. I'd be looking hard at a restaurant."

However, he added, "When you include food and beverage you might be eliminating the number of people who would be willing to build this hotel." It could also be difficult to properly staff a hotel, events center and restaurant, he said.

An on-site restaurant could have its benefits. "If you have conventions where people are going to be there for several days it's nice for them to be able to grab a meal," Sherf said. But the ultimate feasibility will depend on other area dining establishments.

The issue set off a lengthy discussion among councilmen regarding just how involved the city would be in a potential restaurant.

"It is my intent that we in the city not be in a competing position with members of our community in terms of food and beverage. Shouldn't we take somewhat of a backseat approach?" questioned Alderman Lyle Ten Haken, later adding he wasn't sure if the council should determine whether a restaurant would be free-standing or connected to the center.

"I think it's accurate to say we don't want to be involved in running a restaurant," responded Alderman Mike Woll. "However, by the nature of signing a contract with (a developer), we are picking somebody. I don't think we'll be in a position to say 'You guys need to be fair.'"

Alderman Ron Wood agreed. "As we receive proposals for this, I would hope that we look at what each will do for our community. ... I might lean more toward the one that says 'I'm committed to bringing a restaurant in,' but I'm not going to run the restaurant."

The council agreed they would not force the developer to pursue any restaurant options, but the debate may be ongoing. Sherf pointed out the developer could also contract with a caterer instead of pursuing a full restaurant operation.

Sherf's staff will also meet with community members and hotel operators and examine local businesses and event centers in comparable communities to determine what Worthington needs.

"We talk to the hotel operators ... we look at the rates they're charging. We talk to major employers, we ask them if they could devise any kind of meeting space, what would they like? We also try to identify any functions that are leaving the community (due to lack of) facilities," he explained. "We're trying to figure out 'What is the right size?' 'Do we need meeting rooms?' 'How frequently are they coming?'"

He said Worthington does have a shortage of meeting space, and his goal will be to determine what type of center would be economically viable.

"A hotel can't survive only on convention business. The key to the convention center is attracting groups that stay overnight." The convention (events) center would attract several categories of business, including business from the interstate, weddings or other special events and group business.

Meanwhile, city staff is tasked with determining how the report will be distributed to potential developers. A draft of the report will be submitted for council review by early February.

The city will fund construction of the events center with proceeds from the half-cent local option sales tax approved by voters during the Nov. 4, 2008, general election. The developer would fund construction of a hotel and oversee day-to-day operations in both facilities.