TOWER—The preliminary results of a market study have confirmed that Tower could support a 36-unit hotel near the site of the city’s planned new harbor, and that significantly improves the prospects for construction of a Cobblestone Inn and Suites at the site.
The hotel, which would include conference facilities and a pool, could become a centerpiece of the city’s harbor renovation. Dredging, sheeting and installation of docking at the harbor is slated for completion this summer, depending on the results of a new grant application to the Minnesota Department of Employment and Economic Development, or DEED.
The estimated $2.25 million hotel project has been in the works for a few months. Indeed, the company has already submitted a letter to DEED indicating its intent to develop the project, pending the results of the market study.
“This is a very positive step forward,” said Tower Mayor Steve Abrahamson. “The preliminary results certainly look favorable. Hopefully the final draft will be as positive.”
Wisconsin-based Cobblestone Hotels LLC, was created in 2008 and has become one of the nation’s fastest-growing hotel chains. The company focuses on small towns in underserved regions, where it constructs small hotels geared towards the upper end of the mid-scale hotel market. Cobblestone has built 35 hotels over the past six years, with another 55 either under construction or in the development stage, according to the company’s website.
The company opened a new 44-room hotel in Crookston in January and has several hotel projects under development in North Dakota as well. Similar Cobblestone projects have cost about $2-$3 million to build and typically employ about 12-15 people, both full- and part-time.
In developing hotels, Cobblestone and its partner BriMark Construction, typically seek local investors on such projects, and the company has already identified some interested local parties.
While the prospects of a hotel project appear better than ever, a number of issues remain to be resolved. Officials from both the city and Cobblestone would need to agree on a location and a purchase price, if they ultimately choose to develop city-owned land. The city would also potentially need to extend water and sewer to the site. Currently, the company is eyeing a city-owned parcel on the south side of the new harbor, but road access to the site is somewhat complicated due to the re-routing of Hwy. 135. Other parcels along the harbor are either privately-owned, or have wetland issues to consider.
Development of the hotel probably would not move forward until the harbor work is well underway, and that work is awaiting additional funding. The city still has about $1 million allocated for the work, but it needs an additional $900,000 to complete the project. The city is still waiting to hear from DEED on a $500,000 grant request, which the city submitted last week. The prospect of a major private investor, such as Cobblestone, should improve the project’s odds for funding, said Abrahamson.
Additional funds could come from the city, through the sale of surplus land or the establishment of a tax increment financing district.