Council requests proposals for events center project

Talk about it

WORTHINGTON — The city will soon solicit a request for proposals from developers for its combination events center and hotel complex.

The council heard Monday from Steve Sherf, president of Hospitality Consulting Group Inc., who reviewed his research on the feasibility of such a complex.

The Worthington Hotel and Event Center Study showed mixed indicators: national hotel revenue fell by about 16 percent last year, with Worthington revenue falling 11 percent. However, the industry is expected to recover in 2013; and occupancy rates for the proposed hotel are conservatively expected to reach 57 percent by 2016.

“I don’t think that you’ll gain too much by wait-and-see; I think we’re going to see the clouds blowing away this summer,” Sherf said.

He recommended the city pursue a combination hotel and events center, even though hotel developers face less-than-favorable lending requirements. For the roughly $8 million hotel project, developers would need to have $3.8 million in equity.

“This isn’t the kiss of death, but it’s going to be a tough project under conventional financing terms,” Sherf said.

He added building a free-standing events center “wouldn’t get anywhere near the number of conventions and events that we’re predicting.”

Among his other recommendations: not marketing to entertainment or consumer show groups; including a ballroom with capacity for roughly 500; and using a small plating, warming and cooling area for food in the center, rather than a full kitchen.

Sherf said the proposed location at the Bio Science Park is favorable

The events center will be funded by the half-cent local option sales tax, which was approved by voters at the Nov. 4, 2008, general election. The hotel construction and operation, as well as operation of the events center, would be financed by a private developer.

In other business, the council on Monday:

- Approved an action plan for economic development.

- Approved a $2,000 contract with Dakota Golf Management for development of Prairie View Golf Links, including establishment of an online reservations program, growth in league play, establishment of a plan for event planning and improvement of advertising strategies and instructional programs.

- Approved a change to the city’s sidewalk ordinance stating that surfaced walking paths between the back of the curb and public sidewalk will be considered landscaping and will not serve as a pedestrian public sidewalk system. Additionally, such paths may be spaced no fewer than 20 feet from the nearest path and be made of the same materials as municipal sidewalks, namely bituminous and concrete.

- Approved a cooperative construction agreement with the Minnesota Department of Transportation for the Minnesota 60 project. The city and state will share the cost of a nearly $50,000 relocation of a water main at the intersection of Palm Street and Minnesota 60.

- Ordered preparation of a feasibility report regarding 2010 street and alley reconstruction improvements.

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