County banking on revenue from fairgrounds hotel

By JoAn Bjarko
North Forty News

An agreement with John Q. Hammons to build an Embassy Suites Hotel and Convention Center at the fairgrounds puts Larimer County in a new league for drawing crowds, while income could provide part of the revenue needed to construct a promised 4-H building.

County commissioners voted 2-1 on April 5 to lease 9.2 acres at the southwest corner of the fairgrounds site to the hotelier. The county offered no financial incentives to get the 55-year lease, and it expects to be paid between $18 million and $24 million during the term of the contract.

The publicly traded company, John Q. Hammons Hotels & Resorts, owns or manages 61 hotels located in 22 states. The agreement with Larimer County calls for construction to begin in April 2006 and to be completed within 20 months. The projected cost, borne solely by the hotelier, is $35 million, which will provide about 290 rooms and an 80,000-square-foot convention center. "The existence of a hotel on our fairgrounds site will be a great advantage to booking of future shows and has always been a part of our master plan vision," said fairgrounds director Jay Hardy. The Loveland hotel will be one of 14 in Hammons' personal inventory, he added.

When commissioners discussed the lease, Karen Wagner said she was concerned about the lack of public discussion about the details. "The most important part of our job is to have a good discussion and not rubber stamp things," she said, adding that she supported the idea of a hotel at the fairgrounds.

Wagner also objected that the county would endorse the hotel before the transportation issues surrounding the fairgrounds have been resolved. "We are approving this without adequate public facilities," she said.

Commissioner Kathay Rennels disagreed with her concerns, however, saying the county staff's job is to work out the details. "I think Jay's responsibility as executive director is to get the best deal he can for us," she said.

Hardy said John Q. Hammons was the top choice because the company would take all the financial risk. "It's very rare to have something where local government isn't contributing," added county manager Frank Lancaster.

In 2002, the county borrowed $53.7 million to build the fairgrounds east of Interstate 25 and is making bond payments with sales tax revenue. Although finance director Carol Block described local sales tax income as a "roller coaster ride" over the past several years, she said revenues are sufficient to make all the payments on the county's new buildings.

At one time, local officials hoped the sales taxes would generate enough excess income to complete construction plans proposed in the fairgrounds master plan. That is not happening.

"There's certainly not enough to start throwing up steel again," Hardy said, but he isn't giving up.

Hardy has been analyzing potential revenue sources that, when combined, could pay off bonding for a new 4-H building. In addition to income form the land lease with John Q. Hammons, the county could get income from naming rights and event fees. A critical component, however, would be for county commissioners to agree to continue providing about $250,000 a year from the general fund to the fairgrounds, Hardy said.

He said a 40,000-square-foot 4-H building with an indoor shooting range would cost about $6 million. The building, he noted, would free up the same amount of space in the exhibition halls, which are in high demand.

Hardy said he realizes that putting together a proposal with several funding streams will be a tough sell, but he is not easily deterred. "I was executive director of DDA (Downtown Development Authority) when we renovated the Northern Hotel, and that took nine different funding partners," he said.