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Investment group believes it has partners in place to make Delano hotel a reality

December 22, 2008

By Ryan Gueningsman
Managing Editor

A scaled-back version of plans for a hotel and banquet center in Delano was discussed Tuesday morning at the Delano Area Chamber of Commerce’s Highway 12 Task Force meeting.

Tom Schaffer of Crow River Hospitality and USAquatics said plans have been in the works for a facility for several years. The project will be located on 3.6 acres of land along Highway 12 between Ridgeview Medical Clinic and Delano Crossings that is owned by the investment group.

“About two-and-a-half years ago, we were at a Lions meeting, and a few of us were complaining about no hotel in Delano,” Schaffer recalled. “I was complaining that I’ve got four sons and three of them are now married and there is no place to put up relatives or host a wedding. We bounced the idea along, and somebody at the Lions Club said, ‘if you think it’s such a good idea, why don’t you do it?’”

So, Schaffer set to work to see if it is something that would be possible. USAquatics is an engineering firm that specializes in aquatics, mainly water parks, community pools, and community centers.

“We do recreational water design,” he said. He has been in the business for about 34 years, and has lived in Delano since April 2000.

With his background, plans for the hotel facility in Delano originally included a waterpark, but recently, those plans have been scaled back because funding isn’t available for that right now.

“Over the years, we’ve tried to get this project implemented,” commented Tom’s son, Rick Schaffer, also a member of the investment group. “A lot of the reasons for the changes have been the result of discussions we’ve had with business people in town, families in town, and city people. We’ve tried to be very open and talkative with the project.”

He said the biggest hurdle for the project has been funding. Innovation Investment Partners includes Tom, Rick, and Ben Schaffer, Curt Christensen, and Ed Schmidt.

“Everybody knows right now the economy is kind of tough,” Rick said. “That’s what we’re struggling with right now – we need to find financing. Banks are only funding the golden eggs projects. Anything else is tough to get moving. We tried to adjust plans and find that golden egg.”

The proposal right now calls for a hotel facility with between 68 and 72 rooms. There will be 16 additional rooms shelled on the first floor.

“The reason for the adjustment is because we’ve been looking at the possibility of doing more suites in the property,” Rick said. “There’s also been some interest in some extended-stay rooms.”

He said industrial park leaders have also expressed a need to have a place to put people up for a period of weeks, or even months.

Along with the rooms, plans include the hotel lobby, a 35x60 foot pool with a splash area and hot tub, large banquet hall, meeting spaces, outdoor patio space, and the parking lot. Rick said they want to make the property fit in with other properties in that area.

“We’re trying to give an appearance,” Rick said. “The city wants to grow the area.”

Despite the scaled-back version of the plans, Rick said he is hopeful that one day, the aquatic side of it will still be possible, noting that space is available on the site for expansion.

“We’re trying to figure out how to build it so we can cash flow it when it opens,” Rick said. The additional 16 rooms that will be shelled have flexibility in their use, including the possibility of more rooms, additional banquet hall space, or lease space possibly.

“We have some options there,” he said, noting rooms will be on the second, third, and fourth floors. “We also have the ability under the current plan to add 24 future rooms off to the end of it.”

Originally slated to be an AmericInn franchise, Tom said the group essentially “wasted” nine months attempting to get restrictions that AmericInn in Long Lake had lifted in order to allow for another one to be built in Delano before deciding to pull the plug with them.

“We went to Choice Hotels and looked at their banners and chose to go Comfort Inn and Suites. We have been talking to a lot of other Choice Hotel developers, and they have convinced us, for Delano, it would be better if we went from Comfort Inn to Comfort Suites and have all suites. We’re looking at adopting a plan to facilitate all suites with some extended stays,” Tom said.

“Not every room gets a hot tub though,” Rick joked.

The original plans with the water park allowed for public entry, meaning one wouldn’t have to rent a room to get in to use the pool and aquatic center.

“With the reduced aquatics, it’s going to eliminate a majority of that,” Rick said, and noted it will still have a fitness center in the facility, but said they don’t want to compete with existing fitness centers in Delano.

The banquet center will be able to seat 312 with a dance floor, which Rick said would be large enough for a “good-sized” wedding.

Tom noted the banquet facility will have folding walls, which can divide it into smaller rooms. The facility will also have some boardroom- sized meeting rooms planned.

What’s next

The group has already spoken with the city, planning commission, and now will come back with the reduced plan.

“The land is purchased,” Rick said. “That is acquired, it’s there. The Comfort Inn franchise is secured. Crow River Hospitality owns the franchise. Comfort Inn is on board and has tried to help us find financing to get this project started.”

He said Choice Hotels is also assisting them in locating a management company that will also help with some financing, and ultimately bring some jobs to Delano through the project.

Rick said the drawings are about 95 percent complete, and a full business plan is in place. For the big financing question, Rick feels they finally have it in place.

“We have found the rest of the partners we need,” Rick said. “We believe we have the final equity pieces that we need to get this project moving. The economy helps us, but it’s also been a struggle. People aren’t quite sure about hotels.”

Both Rick and Tom said they are very excited about this project, and see the need for it in the community.

“I get calls nearly every week looking for places to stay in Delano, particularly around the Fourth of July and hockey and baseball tournaments, so there’s definitely an interest,” said Delano Area Chamber of Commerce Executive Director Jean Kopp. “People are disappointed when I have to point them toward Buffalo or Plymouth.”

Rick said people have already called him to book weddings or inquire about hosting events at the facility. He said they hope to break ground on the project in spring of 2009, and said there are a few puzzle pieces that need to definitely be in place yet. He said the investment group also wants to have more discussions with the city and also host an open house forum where residents can come share thoughts about the project.

“We have our properties mortgaged, and we have every last dollar and dime we can scratch to try to put into this thing,” Rick said. “That’s how much we believe in what we’re tying to do. We’ve got nothing left to put in.”

The next meeting of the Delano Area Chamber of Commerce’s Highway 12 Task Force will be Tuesday, Jan. 6 at 9 a.m. at State Bank of Delano. These meetings are open to the public.


 

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