By Brian Bearden, TSB Contributor
The proposed Gateway Hotel and Conference Center is drawing fire from two McKinney hotel operators and taxpayers.
Existing hotel operators said they see no fairness on the playing field when it comes to the Gateway plan and question whether the plan can succeed.
Paul Singh, general manager of the LaQuinta Inn and Suites on Henneman Way off the Sam Rayburn Tollway near the ballfields at Craig Ranch, expressed his concern that city money would be going toward the hotel project while existing hotels pay taxes but do not receive help nor ask for any from the city.
“We have been struggling big time,” Singh told the city council. “I have been pouring money out of my own pocket.”
Singh and the owner of the Holiday Inn asked the council to hold a public hearing so that more residents and business owners in the city can give their views on the hotel and conference center project at SRT and Central Expressway (U.S. 75).
(Editor’s Note: For more background on the Gateway project, you can read a previous explanatory story from TSB publisher Angie Bado by clicking here.)
Since Tuesday’s council meeting, council members have been out in front of the public. Mayor Pro-Tem Travis Ussery and At-Large councilman Roger Harris fielded questions on Gateway at the TownSquareBuzz.com Town Hall at MPAC on Thursday night. The council members told the town hall gathering that the plan for the conference center and hotel will work and serve as the beginning point to finding a solution for what’s been a problem at the entrance to the city for a long time.
EXISTING HOTEL OWNERS OBJECTING
Charles Helm, owner of the Holiday Inn Hotel & Suites in McKinney and a former chairman of the board of Best Western International (which had 4,000 properties in 90 countries, offered his experience to the city council. Helm is past president of the Hopkins County Economic Development Corporation and has also been a president of the Hopkins County Regional Convention Center in East Texas.
Helm assembled a package for the city council that included marked-up copies of the project’s feasibility study. Helm told the council he found inadequacies in the study and shared them with the city manager.
Helm told the city council on Tuesday night that he supports:
1. A public hearing or town hall.
2. Requesting a copy of the Letter of Intent since it was approved in open session.
3. Requesting a “Lost Business Report” to justify the project.
4. A further review of feasibility studies that addressed points that hotel operators are not satisfied the council has addressed.
5. An updated feasibility study on impact on hotels in McKinney.
6. A further review in comparing this project to the Craig Ranch project.
Helm said, “We do not feel tax money should be spent on building a hotel. Basically that is unfair competition. Think about it. We are not afraid of competition as long as we are able to compete on a level playing field. We agree more meeting space would be desirable and that is what the tax money should be spent on not a hotel.”
Helm said he believes that a better negotiated deal with Craig Ranch for meeting space offers a much better chance of being a success.
“As a taxpayer in this great city, we object to using citizens’ tax money to build a hotel. After everything is said, we are not asking you to think like us but rather to think with us.”
Matt Dalrymple, general manager of the Holiday Inn & Suites McKinney, asked the city council why money is being used out of the city’s general fund for the project. He asked the council to tell taxpayers how much money will be devoted to the hotel and conference center and questioned if the city has a safety net if the project fails.
The hotel operators asked the city council to consider that in a slow economy McKinney has lost two corporations (Kone Corporation and Blue Mountain Equipment Rental Corporations).
The hotel owners stated that demand generators in McKinney are not sufficient to support a 185-unit conference hotel along with an already high number of hotel rooms available.
They said the McKinney market is running at 57 percent occupancy. Helm said on average McKinney has more than 370 empty rooms every night.
Hotel operators also sent a letter to the city. The key points included:
“Our goal is to convey to you that approving this 185-unit Conference Hotel (or a Conference Center project with hotel(s) with a similar room count) for development will be a critical mistake.
“We intend to show you how fragile the current lodging environment is in McKinney and how adding this 185-unit hotel and conference center will only further undermine revenue at existing hotels and subsequently bring property values down. Under different circumstances, we as hoteliers and entrepreneurs would welcome the addition of this 185-unit Hotel with a Conference Center, however, the McKinney market is not ready for such a project.
“There are just not enough demand generators for existing hotels in McKinney. Priority should be on attracting businesses to McKinney that will generate business for hotels. A 185-unit hotel will add 67,525 available room nights on an annual basis in McKinney in an already soft market.”
The letter also said that “When compared to other successful markets, it is clear that McKinney has a big population, but little to draw visitors into the city. Population has very little to do with the need for hotel rooms.”
The City Council approved the Letter of Intent with the developers of the hotel and conference center two weeks ago. The city manager’s office will be going back to the McKinney Community Development Corporation for funding, possibly as soon as next week. Once funds are approved by the MCDC, the project will move ahead.
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