Commissioners question new hotel, conference center

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A proposal to use state dollars to help build a new hotel and conference center in Powell received the backing of Park County commissioners last week, though it was a hesitant endorsement.

Commissioner Joe Tilden called the proposed multi-million dollar public/private partnership “real risky,” Commissioner Jake Fulkerson called it a “huge gamble” and Commissioner Tim French said he was “having a hard time with it.”

Despite their reservations, however, commissioners wished hotel developer Steve Wahrlich and Powell Economic Partnership Executive Director Christine Bekes luck and unanimously voted to send a letter of support for a $2.6 million state grant that would boost the roughly $10 million project.

“There’s a real need for it down in Powell and I sincerely hope it goes. I really do,” Commissioner Tilden said of the proposed facility, saying it could be “great” for the entire county.

Bekes, who’s been working for years to bring a new hotel to Powell, told the board it’s “an awesome project” and “an incredible opportunity” for Powell and the county.

Citing the additional visitors and spending that the hotel and conference center could draw to Powell’s restaurants and stores in the coming decades, “it is a game-changer and it makes a huge difference in terms of our community moving forward and a rural community moving forward,” Bekes said.

She said Powell has a need for additional, modern lodging. Further, Powell Economic Partnership figures the project would create 33 new jobs with a $1.1 million payroll while bringing in upwards of $550,000 of lodging, sales and property taxes each year.

As for putting public money into the project, Bekes and Wahrlich said it’s the only way the numbers will work for a large conference center and a 72- to 78-room hotel. And Bekes noted that all of the $2.6 million of public money invested in the project would be returned to the City of Powell and the State of Wyoming through lease payments spread out over the next 20 years.

The hotel, known as Powell Clocktower LLC, would lease the conference center from the city and ultimately have the option to buy it. The city would not be involved in the day-to-day operations of the facility and the Clocktower would be responsible for all the maintenance, Bekes said.

In the end, the public money would basically amount to an interest-free loan on the conference center — with lower lease payments in the early years to help the business get up and running.

Wahrlich said the conference center is needed to attract business to the hotel during the slower winter months. He would expect to hold 10 to 15 large conferences a year, while also accommodating the sports teams and other groups that currently stay in Cody for big events held in Powell.

“The business is there,” Wahrlich said. “It’s just not there in Powell at this particular time.”

Bekes added that, “It’s not even about what we have [in Powell now] and what may or may not be served as well as it could — which I would say is a big gap — but it’s really about what we don’t have, and attracting that.”

However, Wahrlich said privately financing the construction of the roughly $3 million, 10,000 square foot conference center — in addition to the $7.5 million, 75-room hotel — would mean having to charge another $40 to $50 per night.

“And it’s just not going to work from that standpoint, especially not the first three or four years,” Wahrlich said.

That’s where the state aid would come in.

Before agreeing to send a letter of support, commissioners asked several questions about why the project couldn’t be privately financed, how it would impact other local facilities and whether the business would be feasible.

“I’d say it’s very risky,” said Commissioner Fulkerson. “Without the Wyoming Business Council involved, I don’t think it would stand any chance at all. I just wonder if enough of the financial burden is relieved in the early years to make it successful; that’s the big question.”

There’s also the question of whether the Wyoming Business Council — and then the State Loan and Investment Board — will approve the funding for the project: Competition for the state dollars is expected to be fierce.

If the public dollars don’t come through, commissioners wondered what would happen to the project.

“We bought the land, so we’ve got to do something with it,” Wahrlich said, referring to the roughly 4 acres of vacant land that he and another investor own in the Gatewest West development on Powell’s western edge.

However, without the state funding, the project “won’t look like it does today,” he said, suggesting he would have decide how to downscale the facility.

As for how the new hotel and conference center would affect the existing venues in Powell, Wahrlich predicted it would impact other hotels “a little” in the summer, drive rates up and likely pressure the other hotels to improve their facilities.

“I think ultimately, if there’s more business during the winter, they will actually see more business in the winter,” Wahrlich said, suggesting that boost could come in Clocktower Powell’s third or fourth year of operation.

The owner of one Powell hotel, Wayne Knapp, spoke out against the project at the July 10 commission meeting.

“... You’re basically turning over a government-funded and paid for convention center to a private industry and going into direct competition with private industry,” Knapp said, calling it a “dangerous precedent.”

He added that, “If you’re trying to entice private investors to come into an area, and you pull something like this, private investors have other places to go. And it probably is not the best image if you want to do a prolonged growth of an area, because the government certainly can’t do all the development.”

Knapp declined to tell the Tribune what businesses he owned, telling a reporter to “investigate.” A Tribune review of business and property records indicates that Knapp owns the Americas Best Value Inn on Second Street plus at least three hotels on Cody’s west strip — the Six Gun Motel, the Kings Inn and the AmericInn Lodge and Suites.

Commissioner Tilden said he didn’t believe the new conference center and hotel would directly compete with the majority of people.

As part of the match for the $2.6 million grant, Wahrlich has already paid roughly $15,000 for architectural work. If the project is approved by the state, he would also turn the 2 acres of the land beneath the conference center over to the city — property that’s valued at more than $200,000, Bekes said.

The City of Powell, meanwhile, would contribute $72,000, potentially through staff time or waived fees, Bekes said. Finally, PEP is contributing $5,000, which came from the sale of Powell’s now-defunct community-owned store, The Merc.

Staff from the Wyoming Business Council are scheduled to make a site visit next week and then make a recommendation to the council as to whether the project should be funded. The council will make its own recommendation in September, with the State Loan and Investment Board set to make a final decision in October.

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