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Roseville moves forward on plan for full-service hotel

Preliminary study: Hotel and conference center could open in 2015
By: Sena Christian, The Press Tribune
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Roseville doesn't currently have a full-service hotel where visitors can reserve conference center space and book rooms.

But the city of Roseville sees this as a potential revenue source and might pursue a private-public partnership to make it happen. The anticipated opening would be 2015.

"People may choose to stay here that might not otherwise have by virtue of having a full-service hotel," said Roseville Senior Planner Mike Isom, during the April 18 City Council meeting.

The council unanimously approved issuing a request for proposal for a design-build contract to look at site-specific designs and specific financing options. This doesn't commit the city to constructing the project.

The project would cost an estimated $63 million. Under a private-public partnership, the city would pay $12 million upfront. That cost also includes about $20 million in public debt, $26.5 million in private debt, $3.5 million in private equity and $2 million in key money.

The city's annual debt service of about $1.7 million would be paid through the Transit Occupancy Tax, a room surcharge, ballroom lease payment and the general fund. This debt service will exceed room tax revenue until at least 2021, Isom said.

These figures don't include spinoff benefits, such as increased sales tax.

The original budget was $64.9 million, but in December, the city purchased a parcel of land adjacent to Westfield Galleria on Conference Center Drive for $1.9 million plus closing costs.

The city hired a consultant to conduct a preliminary feasibility analysis of a 250-room major hotel chain with a 25,000-square-foot conference center in Roseville. A conference center this size would generate more room demand than could be accommodated by the hotel, which could have spillover benefits on nearby hotels, according to the city.

That study determined that a project is feasible and warrants more evaluation. It was also determined that a fully private model isn't realistic in the current economic climate.

Vice Mayor Susan Rohan asked Isom to discuss the need for a full-service hotel in more detail during the meeting.

"What does the marketplace look like?" Rohan asked.

Isom said the city has a lot of tourists, motorists traveling on I-80 and Highway 65, and government and business-related travel, which is driving the demand. He said current hotel occupancy rates in Roseville are high for industry standards at around 70 percent. A full-service hotel in Roseville would compete against the broader Sacramento region and would attract an estimated 7 percent of the regional market share, which is "pretty healthy," Isom said.

The city's pursuit of a conference center goes back to the 1990s, when officials recognized the need for meeting space and high-end lodging facilities. As reported in an August 2011 Press Tribune article, the city and Kobra Properties attempted several years ago to bring a 38,000-square-foot conference center and two new hotels to town.

But Kobra Properties went bankrupt in 2008 and permits and approvals for that plan later expired.

Sena Christian can be reached at senac@goldcountrymedia.com. Follow her on Twitter at SenaC_RsvPT.