Cobblestone Hotel proposal approved by RC City Council

RICHLAND CENTER, Wis (WRCO / WRCE) – The City of Richland Center sought proposals from qualified hotel developers and management groups to develop a mid to upper scale hotel downtown. Two proposals were received, one from Cobblestone Hotels and one from MarketPointe. The city then submitted the requests to Ehlers Public Finance for review.

Cobblestone Hotels offers upper-midscale hotel accommodations focusing on underserved and secondary markets. They have proposed a mid scale to upper mid scale limited service hotel with approximately 54 rooms and associated amenities. Cobblestone is asking to purchase the land for $1 and $1.4 million in Tax Increment Financing (TIF) assistance. The total development estimate is for just under $10 million, or $185,000 per room.

MarketPointe is a commercial real estate brokerage firm primarily focused and real estate development services within the hospitality.industry. They’ve proposed to partner with GrandStay Hotel & Suites to develop an upscale limited service hotel with approximately 52 rooms and associated amenities. MarketPointe submitted a proposal to purchase the land for one dollar and a 10 year TIF agreement. The total development estimate is for around $8.25 million or $160,000 per room.

The main difference between the two proposals is that Cobblestone is a package deal and MarketPointe is a customized package. After discussing the two options at a special Richland Center City Council meeting last night (Tuesday) for nearly an hour and a half, the council chose which hotel they would prefer. A motion was made to select Cobblestone Hotels and -the motion carried 7-1. This motion is strictly choosing which hotel to go with, it does not consider any of the financials. Negotiations will still have to be held.

The council also discussed the recently annexed 10-acre Lamont Residential Subdivision property. It has $800,000 earmarked from a Housing & Urban Development (HUD) Community Project Funding (CPF) Grant for infrastructure.

Two development scenarios are under consideration, both requiring the City to cover all infrastructure costs: One is a 19-Lot Scenario with an estimated infrastructure cost of $1.5 million. The second is a 9-Lot Scenario with an estimated infrastructure cost of $750,000. To advance the development process effectively, it is essential to establish the lot configuration and infrastructure requirements.

To facilitate this, the City must decide whether to extend public assistance beyond the $800,000 grant.

The City has several options:

To provide no additional public assistance resulting in the development of a 9-lot subdivision.

To provide additional public assistance by reallocating grant funding from other projects to the development of a 19-lot subdivision. It may be fully grant funded or a combination of funding sources.

Or to offer to purchase the land from the developer and continue to develop the property. However, grant funding cannot be used for the purchase of land, but, a combination of funding sources may be considered if this is desired. Some options include using cash on hand, borrowing, or proceeds from the sale of Stori Field.

While grant funding cannot be used for the land, it can still be utilized for infrastructure.

The council moved ahead to work towards a development agreement for a subdivision to include 19 residential sites. The how is still to be worked out.

The council also held an Initial Review of a draft on Council Rules.

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