City OKs Conference Center Idea

But $40M Downtown Development Proposal Far From Done Deal

Posted: September 12, 2012

HARRISONBURG — City Council approved a Maryland developer’s $40 million concept of a partly taxpayer-funded hotel and conference center downtown Tuesday night, opening the process up to other proposals.

Council members stressed that their unanimous endorsement of the concept does not assure the hotel and center will be built, nor does it commit any taxpayer money to it. Under the offer presented at the meeting, Harrisonburg’s financial obligation would be close to $10 million.

Through the Public-Private Education Facilities and Infrastructure Act, the city received an unsolicited proposal to build the hotel and conference center, said Brian Shull, the director of Harrisonburg economic development. The project team is led by dpM Partners LLC of Gaithersburg, Md., and includes local firms Mather Architects and Blackwell Engineering.

A site has not been identified for the project, but the team eyes a place within walking distance of downtown, Shull said.

The infrastructure act allows private firms to finance and partner with governments for certain projects normally funded by taxpayers. Companies come forward with proposals that are unsolicited.

If the government approves the concept of an unsolicited project, as Harrisonburg did Tuesday, it must then give public notice of the idea and request competing proposals for consideration, according to the act. The deadline for other proposals for the hotel and conference center is Nov. 13.

After that date passes, city officials will elect to either have the winning proposal pay for a feasibility study of the hotel and conference center concept or decline to review the idea further. City Manager Kurt Hodgen said if Harrisonburg does not receive additional offers, then that may be an indication the city does not need the development.

In dpM’s proposal, private money would be paired with the city’s financial obligation of $9.57 million in bonds issued toward an 18,180-square-foot conference center. The bonds would be paid off through meals and lodging taxes and other revenues, Shull said.

The center would host state and regional meetings.

Meanwhile, a $20 million, six-story hotel would be privately funded and have 205 rooms. A restaurant would be included, Shull said.

Another $10 million in associated project costs would be covered by the developers.

He said the conference center would give Harrisonburg the largest meeting space between Northern Virginia and Roanoke. It would bring attention and extra tax revenue to the city, Shull added.

But the decision to commit public funds is up to City Council, and that final vote won’t come until later.

Councilman Charles Chenault said he is hopeful that the project can be of value to the city, but he and other members are cautious until they have more information.

“We can’t afford to put taxpayer money behind a project that’s not going to work,” he said.

Contact Preston Knight at 574-6272 or pknight@dnronline.com

 



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