A planned hotel on the northern edge of Midtown Fort Collins is on indefinite hold while the economic fallout from the COVID-19 pandemic sorts itself out.
The city approved redevelopment of the site in August as a six-story Marriott-branded hotel just south of Prospect Road and College Avenue. But property owner Les Kaplan said plans have been shelved for at least a year, maybe longer.
“The hotel market is really in the doldrums,” said Kaplan, who was partnering with Saunders Development and Fort Collins developer Stu MacMillan on the project.
“There’s a lot of uncertainty as to what the condition of hospitality will be even after the virus has receded,” Kaplan said. He is now looking for a short-term tenant for the site “until there’s a little more clarity on the situation.”
He hasn’t ruled out redeveloping the site into something other than a hotel, but still considers it the best use for the property. The property housed Chuck E Cheese until April, when the popular children’s party place closed. Fort Collins Furniture still occupies the other half of the building.
“From my perspective, anything other than a hotel as this one was designed would be an underutilization of the property, but I would consider it,” Kaplan said. “Our enthusiasm for this hotel and the project has not diminished, it’s just the feasibility because of how the economy has been put into question.”
Developers continue to work with the city’s Urban Renewal Authority to get tax increment financing for the hotel project, “but the current hotel environment is admittedly challenging,” said Brett Parmelee of Saunders Development.
The property is part of the Prospect South TIF District approved by the URA board in 2011. TIF money helps developers pay for public improvements such as roads and drainage systems with tax dollars.
Property tax revenue from land within an urban renewal plan area is set at a pre-development base level. As the property’s value increases with redevelopment, the subsequent increase in tax revenue — the increment — goes to the URA to assist with the cost of specific improvements.
Saunders remains excited about the project and is not “walking away or throwing in the towel,” Parmelee said.
“It’s a fantastic site, and I’m a believer that the hotel market will recover in the long term,” he said. “It may take a while, but the market will recover.”
Hotels, many of which shut down temporarily at the start of the pandemic, have suffered as tourism and business travel dried up. Occupancy rates in Fort Collins are down to 47.3% through October, compared with 70.5% last year, according to the Rocky Mountain Lodging Report released Monday.
Revenue per available room, a key metric in the hotel industry, dropped to $67.70, down from $90.40 per night last year. And the average daily rate is down to just under $100 per night, a $28 a night drop, according to the report.
The pandemic has accelerated social tends, including Zoom meetings and online learning, Kaplan said. He questioned whether and when business and tourism travel would rebound and whether more CSU students would opt for online rather than in-person learning.
Located across from the southeastern edge of the CSU campus and within walking distance to downtown or Canvas Stadium, the hotel was expected to be an attractive draw for families visiting the university.
“Now that using Zoom has proven itself to be so effective, are people going to want to go to the expense and take time to travel as much?” Kaplan said. “CSU is in a state of flux right now. Are there going to be as many families wanting to take trips to tour the campus?”
Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado. Contact her at firstname.lastname@example.org. Please support her work and that of other Coloradoan journalists by purchasing a subscription today.