That Edgewater letter, library battle heats up, comments on Apex proposal and volunteers needed for imporant project . . . more, but I gotta be in Baraboo by 9:30.
EDGEWATER
What took them so long? I know Bob Dunn tried to convince me that the other hotels downtown supported his new project, and I always wondered why we hadn’t heard anything. The letter is much more interesting than reported. You might want to read the full letter below, bolded statements are interesting.
LIBRARY BATTLE
I was also wondering what took so long for alders to start revolting . . . finally, Compton starts the “my district first” game.
APEX PROPOSAL AND FRANK LLOYD WRIGHT
I found the comments following this article interesting. While Althouse didn’t really say much, the comments didn’t contain the typical “tear down the run down student housing” comments one might expect.
MENTORS NEEDED
Madison Urban Ministry seeking volunteers . . .
In Dane County there are over 1,600 children who have an incarcerated parent. Children who have an incarcerated parent often face challenges that other kids don’t, disruption in their living situation, worry about their parent, grief and anger over the seperation, and sometimes the trauma of having watched a parent being arrested. Mentoring Connections (a program of Madison-area Urban Ministry) matches children of incarcerated parents with a caring adult mentor, someone to offer a little extra attention, a little respite to a caregiver, and a trusted friend. Currently we have 35 children waiting for a mentor, waiting for someone like you to volunteer an hour a week to hang out, play games, read books, watch movies, go to the park, take a walk or a bike ride. It’s nothing fancy, but it is valuable, your time and friendship.
We offer ongoing mentor training and support, you offer time and attention. It’s a win/win for all.
Please contact Fabu Brisco at 608-256-0906 or fabu@emum.org if you would like more information about volunteering with Mentoring Connections.
EDGEWATER LETTER
We are writing to provide you with some additional information on the Edgewater and Fiore Library/Hotel development proposals. Many statements have been made and statistics quoted that we feel have been misleading. As hotel managers, we wish to clarify this information with our hotel operational experience. The new hotel development proposals would put Madison hotels at a major competitive disadvantage and put many hotel employees’ jobs at significant risk. Mayor Cielewicz has not done proper due diligence and has not used the information presented to him in the hotel studies he commissioned before including both projects in his capital budget.
A recent study listed the Edgewater as a blighted structure. The major reason that the property is in its current condition is the lack of capital investment and profits being invested back into the hotel. National Guardian Life, a company with over $2 billion in asset owns 30% of the Edgewater and did not properly maintain the hotel, allowing it to age with minimal improvements and reinvestment. Now they will likely make a significant amount of money pending the sale of the Edgewater to the Hammes Company, which is completely dependent on the $16 million TIF Hammes is requesting. To remain competitive, hotels must continually update their properties by reinvesting operating funds, not by asking the city of Madison for subsidies.
There has been speculation about the amount of increased room tax that the new Edgewater project would generate. We feel it is essential to use actual data instead of estimated numbers. Bob Dunn has stated that the hotel would command a $200 per night price tag which we feel is unlikely in this market. The average price for a room in Madison based on Smith Travel Research reports, a professional hotel research company, is as follows: the 2009 average daily rate for a Madison hotel room is $89.28 and the 2009 occupancy is 54%.
Adding 107 rooms to the Downtown market on top of the existing 143 rooms at the Edgewater would only give the city an annual hotel room tax increase of $57,457, which is a far cry from the $16 million gift the city is offering. In addition, the revenue from hotel room tax would decline as the occupancy rate in the existing
hotels would decrease with the increased competition.
Bob Dunn is claiming that the new Edgewater development will add 500 jobs and mayor Cielewicz recently stated that the project would add 1,000 new jobs to downtown. The fact is that a 250 room hotel will support only between 125 to 175 employees of which only 50% would be fulltime. The Edgewater currently employees 100 people which means the new development would only increase employment by 25-75 people. Many of these employees may come from a pool of employees laid off from other hotels when occupancies decline due to the new city financed hotel development.
The developer states they need the $16 million for the proposed public space. Complete open access to this public space will create serious operational difficulties for the hotel. Monona Terrace has experienced many of these operational issues with the rooftop terrace public space and they now close this space to the public when events are taking place. As an Innkeeper, it is your responsibility to provide security for your guests and allowing the public open access could create security concerns. Many national hotel chains may not be willing to put their flag on a property with this type of public space. The public space is only proposed so the developer can receive the $16 million up front, but what will happen when these operational difficulties present themselves?
In order to gain clarity on the need for additional hotel rooms, the Mayor hired the Hunden Strategic Partners Company to complete a downtown Madison hotel feasibility study. In the original study dated December 2008, it stated that the city should concentrate its efforts on developing a 400-room hotel attached to Monona Terrace at the Madison Municipal building location site. The city was in negotiation with Marcus Hotels and Resorts until recently when Marcus pulled back due to the economy. Subsequently, three other projects emerged onto the scene – the Apex project, Edgewater project, and the Fiore Library/Hotel project. The Mayor again hired Hunden to perform a follow-up study to determine which project the city should invest in. The report, released August 27th 2009, states that the Edgewater is worthy of priority amongst the projects listed above, but the most important project should be the convention hotel proposed by Marcus.
The study also concluded that the Library project hotel portion should not be a city priority at this time. It also states the city has to carefully choose the projects to include and the timing of those projects. The library project should fall below a true convention hotel, the Edgewater project, and a larger full-service project in terms of priority for the city. A few days after the last report was completed, the Mayor decided once again to back the library/hotel project, not following the recommendation from the professionals he hired. In total, the city has paid $50,000 to Hunden for this research which is a waste of taxpayer’s money if the information is not utilized.
The study also points out that the Apex project is probably not feasible because Apex has no experience in developing and operating a hotel. Bob Dunn has made it clear that Hammes will own and manage the Edgewater Hotel. The study does not point out that Hammes also has no experience developing and operating hotels. It is very risky for the city to invest in a developer that has no hotel experience.
This year has been one of the worst years on record for the hotel industry and many luxury hotels are currently in bankruptcy or facing bankruptcy due to the change in corporate and consumer buying habits. Many hotels are choosing to drop their star ranking because of the expense to operate 4 and 5 star hotels. In most areas of the country it will take 5-10 years for average rates to recover to 2008 levels. A hotel which will require a $200 average rate to remain financially feasible is not possible in this market and is a very risky investment for the city of Madison.
We ask that you look at the facts and join us in our fight against Madison putting the average business owner at a competitive disadvantage.
Sincerely,
Tom Ziarnik, General Manager Steve Zanoni, General Manager Kevin Smith, General Manager, Doubletree Madison Hotel Madison Concourse Hotel Madison Marriott West, Jim Davis, General Manager Bill Wehlman, General Manager, Crowne Plaza Campus Inn, Blaze Brigman, General Manager, Hyatt Place
