Casper Hotel-Conference Center Would Need $30 Million In Public Funding
A $70 million hotel-conference center downtown would impact the profile and economy of Casper for decades.
“I think we should play it out and give it every opportunity, because if it does, it will be a very big deal for this community,” Casper City Council member Charlie Powell said Tuesday.
“I think I would say to the people who haven’t followed this, the impact of a conference center-hotel in this community is an order of magnitude more than most people recognize, and I don’t think we can underestimate its importance,” Powell said.
But that proposal, with the backing of undetermined private investors, counts on resolving a lot of ifs, ands and buts, including closing a gap of at least $30 million in some form or forms of public support, a proponent told city council Tuesday. The presentation was informational only and the council did not take any action on it.
It also means three businesses that bid on two city-owned properties, valued at $517,000, on South Ash Street near the David Street Station will need to wait a half-year for the Conference Center Consortium to come up with a plan for its project nearly 140 times bigger.
That plan still could flame out.
Those young-entrepreneur-driven businesses have the cash in hand and the ability to open next year. They pitched their business plans to the council last month.
Everything seemed a go until the consortium’s apparent last-minute appeal to the council to consider something much bigger.
The consortium is comprised of representatives of the Casper Area Convention & Visitors Bureau, the Amoco Reuse Agreement Joint Powers Board, the Downtown Development Authority, and Forward Casper (part of the Casper Area Economic Development Alliance).
Two weeks ago, its consultants outlined three potential sites previously identified earlier in the decade during one of the previous failed attempts to build the hotel-conference center: The Ash Street properties, the Platte River Commons on the site of the former Amoco refinery, and property owned by Casper Redevelopment Corporation near the river. Land acquisition, infrastructure, construction and other factors amounted to about $70 million for each location.
The firms determined the Ash Street area was the best in terms of financial and location factors.
But the consortium still needed to come up with some numbers for the council to consider.
Tuesday, Brandon Daigle of the Downtown Development Authority outlined the financial requirements for the complex with 200 rooms, a 50,000-square-foot conference center, and 400 parking spaces.
Daigle acknowledged previous failed attempts, but said circumstances are different now because of the economy, property values, investments in Casper, and new tools to help pay for the project.
The basic costs include land acquisition, site preparation, construction costs, soft costs such as permitting and opening costs, he said.
He also outlined assumptions for revenues including a 12 percent internal rate of return for investors – an industry standard; hotel room rates of $150; and an occupancy rate of 67.5 percent.
The developer and investors would bring about $30 million to $35 million to the project, Daigle said.
Local and regional equity would bring about $5 million, he added.
Depending on other factors, Daigle said that leaves about $30 million in public/gap financing needs that could be bridged by new market tax credits, tax increment financing, and large loans from public sources such as the Wyoming Business Council and the State Loan and Investment Board.
Next steps include a market analysis for how many people would use the center, gauging support from private investors, seeking public financing, and finding a flagship hotel chain to operate it, he said.
They will take time, Daigle said. “A lot of these things can’t be agreed to or approved overnight, and so exploring the possibility of these mechanisms and these tools would need to happen over the course of these next few months.”
Public support is critical, he added. When a similar project was being considered before, investors got nervous and withdrew when they saw 5-4 votes on council about offering land, he said.
This proposal is different, because private investors and not the city is pushing the project, Daigle said.
Dallas Laird asked when the hotel-conference center would be open.
Daigle responded, "2021."
Laird also wondered about the assumption that people would be willing to pay $150 a night for a hotel room when the average cost in Casper is $86, and the current occupancy rate is 50.9 percent.
The other major question was about potential public financing.
The Conference Center Consortium won’t know that answer for six months, Daigle said.
“If we cannot close this (funding) gap, we will not have this project in Casper,” Daigle said. “We will have to find other means to have these conferences in Casper.”
Council members Charlie Powell and Amanda Huckabay endorsed the proposal, with Huckabay warning that Casper could lose major events such as the College National Finals Rodeo if the city doesn’t offer better lodging.
Bob Hopkins said he wants to see a hotel-conference center, too, but will oppose it if it is on the Ash Street site.
Meanwhile, the good-faith bids from the three businesses -- Ashby Construction, Inc., (office, residential and commercial spaces); Frosted Tops LLC, (trendy dessert bakery); and 1890, Inc., (production and showroom for Wyoming wares) – remain on hold.
Interim City Attorney Will Chambers said the city council can extend the life of the bids. The council will consider the bids during a public hearing on Dec. 19.