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Discussion continues on hotel feasibility in Cokato
Dec. 3, 2012

By Kristen Miller
News Editor

Can Cokato support a hotel?

That is the question Greg Hanis is trying to answer with the help of business owners and community leaders.

Hanis, president of Hospitality Marketers International, is conducting a feasibility study on behalf of Cobblestone Hotels and the City of Cokato.

As part of that, business owners, manufacturers, bank representatives, and other key community leaders were invited to share their input at a meeting Thursday on whether or not there is a need for hotel accommodations in Cokato.

Oftentimes, cities “don’t know what you have until you really stop to look at it,” Hanis told the 15 people in attendance at city hall.

Which is why Hanis asked each of the attendees what their thoughts were on a hotel coming to Cokato, and asked them to list various town events and attractions that could potentially require hotel accommodations.

Colleen Compton, Dassel-Cokato Arts Association’s executive director, said lodging is often needed to accommodate the various artists who entertain at the DC Performing Arts Center.

Those who have needed lodging have had to go somewhere else, “so there are many opportunities there.”

Council member Carl Harju mentioned the weekend-long service events by some of the area churches, adding, “I think there is good potential there.”

Eric Johnson of Edgewood Gables touched on the sports aspect and the opportunity to host multi-day tournaments if there is lodging available.

Realtor Wayne Murphy said he was curious if the hotel could maintain occupancy during the week, and if it would be utilized by area businesses and manufacturing companies.

A representative from Dura Supreme said the Howard Lake manufacturer of cabinets often will have to move visitors throughout the week back and forth from the west metro because there aren’t any accommodations around here. He also noted that entertainment and dining options are limited in this area and couldn’t say whether or not the company would take advantage of a hotel in Cokato.

Dan Robertson of Kensington Bank said it would definitely find use for it. With a sister bank near Alexandria, there are often employees who would be able to utilize it.

“It would bring a lot of value, provided we can maintain it long-term,” Robertson said.

He also noted that a hotel would bring more money into town as the occupants spend their dollars at local businesses.

Jim Nelson of Faribault Foods commented on the company’s need for space for business meetings and a banquet facility.

Wedding receptions are also a concern, since they are typically located out-of-town due to the lack of facilities to accommodate such large gatherings.

Hanis noted that Cobblestone uses a model that fits smaller communities, typically 30 to 40 rooms, based on 40 percent equity, which reduces the risk to local lenders, and therefore, also reduces room rates.

It was announced that there are seven potential properties within the city limits that will be considered in the feasibility study, keeping in mind water and sewer accessibility and square footage.

Following the meeting, Hanis was planning to tour the various sites and call businesses and manufacturers in the area to determine if there is a need for weekday lodging.

Since this is something companies typically don’t track, it may be harder to pinpoint a quantitative need.

Why Cokato?

Cobblestone Hotels, founded in 2008, targets smaller markets, typically populations of 2,000 to 5,000 in more rural areas where development is available, explained John Siebert, vice president of development for Cobblestone. Siebert also noted that there needs to be interest by the community, as well.

Looking at all of those factors, “Cokato came on the radar,” Siebert said, adding, “I think there is some opportunity here to put a hotel in town.”

Siebert mentioned the hockey arena that is under construction and the potential there to draw occupants.

“If there is a strong enough need, it is our responsibility to fulfill that,” Siebert said, adding that many other hotel chains wouldn’t even consider a small town, which is what makes Cobblestone unique.

The feasibility study will determine whether or not the hotel chain finds Cokato economically viable for a hotel. The study will also help decide what the town’s needs are, so Cobblestone can build a property that meets those needs, he said.

If there is need for meeting space, Cobblestone will take that into consideration and possibly add a larger meeting facility to accommodate.

The model currently being considered is a 36-room hotel with a pool in an effort to capture leisure travelers, Siebert said, adding that a pool typically isn’t included with anything 36 rooms or less.

With the feasibility study expected to be completed by the end of the year or early 2013, Siebert expects a decision to be made relatively quickly thereafter on whether or not a hotel is something his company will pursue.

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