The next major building project for Des Moines will probably be a new downtown hotel.
Why, you ask?
After spending $217 million of public money on a new arena/convention complex, we now learn that not including a new hotel as part of the package was like building a house with no kitchen.
One reason the Iowa Events Center recently failed to attract a national wrestling tournament, an official told a Register colleague, was there simply weren’t enough full-service hotel rooms nearby.
There’s a lot of competition nationally for the type of events the Iowa Events Center wants to attract, and if you look around, you’ll usually find major hotels within a block or two of other event centers.
The only hotel within two blocks of the Iowa center is a 32-year-old Quality Inn that has 155 rooms. Sure, there are 1,150 additional rooms at six other hotels within a 10-block radius, but that’s not the same as being next door, the experts say. Plus, all but two of those hotels were built before 1980.
So, what do we do now?
A consultant hired by Polk County, Pinnacle Advisory Group, says what’s needed is a Hilton- or Sheraton-type hotel with at least 450 rooms and 40,000 square feet of meeting space.
The consultant doesn’t say how much a new hotel would cost, but industry standards indicate a price of $60 million to $80 million, not counting land costs.
The 70-page Pinnacle report wades through a lot of data and makes a case for building a new hotel. What the group doesn’t say is how that will be done.
One reason a hotel wasn’t part of the original package for the Events Center was money. The center was financed largely with money from Polk County. As it turned out, there was barely enough cash to build the main components ” the Wells Fargo Arena and Hy-Vee Hall ” and connect them with the old Veterans Memorial Auditorium.
In the case of a hotel, there’s also a question of propriety.
Most people would probably agree that a hotel shouldn’t be financed with public money, although it’s been done, at least in part, in places as close as Omaha.
Anyway, no one is suggesting that the county finance the hotel, although the Pinnacle report says the county and/or city could provide land and/or tax credits to a developer.
Before that happens, though, something else needs to be done.
There needs to be a plan for integrating the Events Center with the rest of downtown.
It sits on a hill, north of downtown, just off the freeway.
That’s not the best location for promoting synergy with the rest of downtown, but that battle was fought and lost years ago.
What’s important now is figuring a way to link the center with the East Village and Court Avenue districts. Bring it into closer contact with other hotels, restaurants and retail developments that are starting to return downtown. Make them all work together.
Don’t isolate the hotel at the end of a freeway ramp. Figure out a way to encourage people who attend concerts and games and conventions to spill into the rest of downtown before and after events.
One way to do that would be to locate the hotel on the south side of the Events Center. Build it there, and pedestrians will flow out of the hotel and into downtown, said Paul Rottenberg, manager of the Hotel Fort Des Moines and several local restaurants.
Build the new hotel on the north side of the Events Center, and the center becomes a huge barrier between hotel guests and the rest of downtown, Rottenberg said.
I mention this for two reasons.
One is because the Pinnacle report favors a site on the north side of the Events Center. The north site is higher, the consultant notes. A hotel built there would have a more commanding view of the city, and be more visible from the freeway.
Also, the north site is owned by the county, which could be an incentive in luring a developer for the project, the report says. Land south of the Events Center is privately owned. It would be more costly and might require more time to acquire.
Reason No. 2: It will be critical for the Events Center to have the support of other downtown hotel owners and managers.
As it stands, other downtown hotels will take a substantial hit in the short term if a new hotel is built to accommodate the Events Center.
The Pinnacle report says overall occupancy at other downtown hotels will drop 6 to 8 percentage points during the first few years.
That’s a lot, when you figure that the average occupancy now is about 60 percent.
It would be different, said Fort Des Moines owner Jeff Hunter, if the average was 70 percent or more. By industry standards, an average occupancy of 70 percent in the downtown area would indicate room for more competition, Hunter said.
“Sixty percent is pretty tight, “he said.
Hunter is a smart businessman. He recognizes that it’s in his best long-term interest for the Events Center to be as big a success as possible.
He’s willing to pay a short-term price to get there. But for that price he wants assurance that the people on the other side are being as fair as they can to him, and not doing something dumb, like creating an Events Center that stands apart from the rest of downtown.
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