By Starrla Cray
WINSTED, MN Would a new Cobblestone Hotel succeed in Winsted?
Results from a recent hotel feasibility study show that Winsted could support a 31-room facility, equipped with a business center and exercise room.
“The biggest draw would be business use,” City Administrator Clay Wilfahrt said at Tuesday’s council meeting.
About 75 percent of occupancy would likely be commercial. Several businesses in Winsted were interviewed during the study, and a number of them (such as Millerbernd Manufacturing, AZZ, and TetraPak) indicated high use of hotels.
Winsted has been working with Cobblestone Hotels, a small Wisconsin-based chain with 34 hotels in 10 states. If a hotel were to be constructed, Cobblestone would contribute 10 percent of the funding, 40 percent would be through local investors, and the remaining 50 percent would be bank financing.
Wilfahrt said that Cobblestone representatives seemed excited about the results of the feasibility study, and they were confident that the numbers would attract investors.
The total project cost is expected to be $2,173,000, and the return on equity is expected to stabilize at 15 to 17 percent.
Currently, there are six hotels within a 30-minute drive of Winsted (located in Hutchinson, Waconia, and Chanhassen). Based on average room rates in the area, the proposed room rate for Winsted’s hotel could start at $84 per night.
Occupancy is anticipated at 54 percent the first year, followed by a stable rate of 65 to 67 percent in subsequent years.
If a hotel project were to move forward, the amenities and location would be determined by investors.
The next steps will be to draft several layout options, and present the feasibility study to potential investors.
For background information on the proposed hotel, check out the article on page 7A of the Nov. 25, 2013 edition of the Herald Journal.
In other matters, the council authorized staff to advertise for bids for wastewater treatment facility upgrades. The project will be awarded at the Tuesday, June 10 city council meeting.
In November 2013, the total project cost was estimated at $4.4 million. A grant will pay for $1.1 million, and the rest will come from revenue bonds and the sewer fund.
One change from the original plan is to have the discharge pipe run through a farm field south of town, instead of near McLeod County Road 1. This will shorten the distance for the pipe, significantly reducing the cost.
Bolton & Menk city engineer Josh Eckstein said he is currently working with the landowner to secure an easement for installation and maintenance of the pipe.
More information about the wastewater treatment facility upgrades was printed on page 9A of the Nov. 11, 2013 edition of the Herald Journal.
Odds and ends
In other business, the council:
• accepted a $250 Target gift card donation from TDS Telecom to be dedicated to the Winsted Police Department for the 2014 bike rodeo.
• accepted a donation of a pallet of spring water from Casey’s General Store, to be dedicated to the Winsted Volunteer Fire Department.
• accepted a cupcake and cake donation from Bertha Ide to be dedicated to the Winsted Police Department for the 2014 Drug Abuse Resistance Education (DARE) graduation.
• authorized the liquidation of certain outdated Winsted Police Department equipment.
• approved a two-week leave of absence for John Schlechter to be taken in May 2014 and in October 2014, as scheduled with maintenance supervisor Dave Meyer.
• approved a quote from Bargen Incorporated to crack fill certain Winsted streets at a cost not to exceed $14,000.
• scheduled a public hearing during the Tuesday, June 3 council meeting, at 6 p.m., to consider amendments to Winsted’s zoning ordinance regarding the floodplain district.