If you build it…

Published 10:20 am Tuesday, August 9, 2016

WINDSOR – If you build it, will they come?

That’s certainly what a joint feasibility study of a proposed limited service hotel in Bertie County hopes to show.

The study was prepared for the county’s Economic Development Commission and funded together by the Bertie County Commissioners and the Town of Windsor.

Hotel and Club Associates of Virginia analyzed the county’s lodging market as it pertains to such a facility, and based on their research and analysis, a midscale limited-service hotel most represents the type, cost, amenities and price point best suited to the current and anticipated lodging demand identified in the market.

“Things have to come together,” said Richard Keegan, who helped prepare the study and presented it to a joint group of Town Council persons and Bertie County Commissioners at the Inn at Gray’s Landing in Windsor. “There’s no reason to be ‘over-the-moon’ because this is a great opportunity because of the age of the other hotel properties in the market area.”

That area includes hotel facilities in Williamston, Plymouth, Edenton, and the distance to Greenville for lodging.

“Something here in the biggest county in North Carolina could use a hotel,” Keegan concluded.

The study’s analysis indicates that it would cost approximately $3,900,000 to develop a 48-room, midscale limited-service hotel and the property should produce an unleveraged Internal Rate of Return (IRR) of 10.5 percent. Rates for the rooms would be in the range of $80 to $130 a night.

According to the study, that amount of return is considered reasonable based on competent, efficient management and responsible ownership, along with the accepted market returns for similar hotel investments.

“It has to be sized properly,” Keegan continued. “You can’t move them because if you make a mistake you can’t just pick it up and take it down to Florida.”

The most suitable nationally-known brands on the market today which meet the two most important brand-selection criteria for the market (affordable construction and receiving a waiver from a franchisee for less than 60 rooms) were: Best Western; Comfort Inn and Sleep Inn, both by Choice Hotels; and Microtel Inn & Suites by Wyndham.

Construction costs, below average reservation systems, and room count minimums eliminated some of the other brands.

Three pieces of property were cited for the location (which is also included in that near $4 million price tag).

– Marshall Williford Site – located at the SW quarter of US 13-17 Bypass and US 13 Business/King Street, west of and adjacent to the Walgreens/Food Lion shopping center.

– Spruill Site – the SW quarter of US 13-17 Bypass and NC 308/Sterlingworth Street, between Wayland and Charles Streets across from the Town House Restaurant and Edenton Motors.

– Three (3) raw land sites that triangulate at the intersection of US 13-17 Bypass and State Road 1100 (Ghent Street/Grabtown Road): (a) SE quarter of US 17/13 Bypass and SR 1100/Ghent Street; (b) NE quarter of US 17/13 Bypass and SR 1100/Ghent Street; and, (c) SW quarter of BYP 17/13 and SR 1100/Grabtown Rd.

Aiding the perception is also the proposed Interstate-44, which follows a path along US 64, beginning at I-40 in Raleigh, intersecting with I-95 near Rocky Mount, on to Williamston and then following to US 17 North through Elizabeth City to Norfolk/Hampton Roads, and the Tidewater area of Virginia.

“If the Interstate comes you’re in a really good situation because it’s still a distance to Edenton,” Keegan said. “If you’ve got what people are looking for here it’s a very convenient place to stop and it just makes sense and becomes an easier task than what we’re making it now.”

Keegan also indicated that there are caveats that might cause the skeptics to be wary.

“Project costs,” he said. “When I say land costs, I don’t mean raw land I mean land you can build on. Every construction developer, every engineer knows you’re going to have a certain amount of site prep; but bringing utilities and infrastructure to the site is different. If you have mains running along the highway and you can tap in, then that’s a buildable site. If you can get all that, an acre-and-a-half to two acres for $150,000 to $250,000 maximum, then that’s great. If that’s not available then it gets very tight.”

Keegan said if capacity volume were scaled back to 40 rooms, then the cost would drop to $3.6 million.

“That would bring you to about a 9.6 percent IRR, and you want to be in the 7.75 to 10.5 percent range; so you’re comfortably in that range,” Keegan stated. “That means we can get a marginally better site, or we can pay marginally more and bring it down to maybe 8.9 percent – still within the parameters and maybe you’re getting the site you want, allowing you to maybe pay the $250,000 for the site in that scenario.”

Keegan said to insure the success of the venture, management needed to initiate and maintain a strong pre-opening marketing effort; initiate, cultivate, and maintain positive relationships with primary demand generators: Edenton-Plymouth-Williamston-Windsor-based employers with strong national and regional affiliations, local and regional tourism officials, especially those involved in fishing, golf and water sports tournaments, festival and event planning; and relationships with pastors, funeral homes, special events/wedding halls, and the Cashie Convention Center.

“It has potential, but it’s going to need management,” Keegan concluded.

Windsor’s Town Commissioners agreed to meet and review the study, then meet jointly with the County Commissioners at a later time so that both groups can pursue the matter further.