Wheels still turning on hotel proposal

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Des Moines appears to be destined to get a new hotel near the Iowa Events Center, but the completion date of such a facility is probably 2 1/2 years away.

“I’ll ask the Polk County Board of Supervisors to issue an RFQ [request for qualifications] within the next six months,” said County Administrator Mike Freilinger. “Once you issue the RFQ, wait for responses, narrow down the list and do interviews, select a developer, negotiate an agreement, do the architectural design and construction –say you issue an RFQ next January, you’re probably talking two years after that before the hotel would open.”

That first step would be a request for qualifications rather than for proposals because “on a project like this, it takes so much time and investment by a developer to prepare a proposal,” Freilinger said. “Unless they think they have a good chance of getting the project, they don’t prepare it.”

A report completed by Pinnacle Advisory Group a year ago said a hotel located near the Events Center would be economically feasible. However, Freilinger said, “Some level of subsidies will be sought by the developer. Depending on the room rates you can charge and the type of conventions you can book, there will need to be some incentive for the developer. Historically, the only place you can build something like this without a subsidy is New York City, because the room rates there are so high.”

To speed up the decision-making process, county officials asked for a favor from Erin Olson-Douglas, who is conducting a one-year downtown planning study for the city.

“She’s been asked to focus on the north side of downtown immediately, so we have the benefit of that information as we proceed with the RFQ,” Freilinger said.

“Even though it’s a little out of sequence, I’ve been working with them to look at ancillary opportunities around the Events Center,” Olson-Douglas said. At this point, she said, “three or four” sites appear to be potential locations for a hotel.

The Pinnacle report evaluated just two sites – the county-owned parking lot north of Veterans Memorial Auditorium and a privately owned parking lot south of Hy-Vee Hall. It concluded that “the north site is vastly superior to the south site” and noted that “the south site could be developed in the future with complementary land uses. Examples of such uses would include retail, entertainment and dining facilities.”

KC Real Estate L.C., a partnership between Bill Knapp and Jim Cownie, bought a piece of property one block south of the Events Center one year ago. Bill Knapp II said at the time that the parcel is “a potential hotel site.”

Part of Olson-Douglas’ mission is to determine how a hotel and other new development might work together and with existing downtown facilities. “We want to look at emerging opportunities,” she said. “What are the opportunities because we have a lovely Events Center complex? What are the opportunities because we’re going to extend Martin Luther King Jr. Parkway across the Des Moines River? What are the opportunities because the East Village has been so wildly successful?”

Olson-Douglas, an architect who previously worked at Substance Architecture, said people in the convention and arena entertainment industry look at such factors when making their booking decisions. “Planners first ask how many square feet are available, so they know whether they can make their event work within the facility,” she said, “but the second level is, will people actually come to this event? Then the line of questioning turns to what’s going on in Des Moines and immediately around the facility.”

Critics of a new hotel contend that downtown Des Moines already has sufficient hotel rooms. Hotel occupancy in Central Iowa is running at about 60 percent so far in 2006, according to Greg Edwards, president of the Greater Des Moines Convention and Visitors Bureau. He said the national average is in the low 60s.

The overall occupancy number only tells part of the story, however, “To a certain extent, business travel does seem to be on the increase over the past year or so,” he said. “But can you operate a hotel based on three nights a week?

“We’re always trying to talk [convention] people into what we call the valley pattern – holding their event on a weekend or a Sunday to Monday night pattern, because those are the slowest nights. We haven’t turned away any business, but it is tougher for a large group that wants a large block of rooms from Tuesday through Thursday.”

“We are seeing more business travel as a result of growth in the economy,” agreed Cindy Roberts, the director of sales and marketing at the Des Moines Marriott Downtown. “That can have an impact on convention schedules; but if we have committed to a convention, we don’t ask them to move.”

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