A hotel holdup

SANDUSKY — Even though activity remains stagnant, a hotelier hasn't checked out of a plan to build a multimillion-dollar property smack-dab in downtown Sandusky. "North Coast Inns and the Longer family are fully committed to this project and look forward to working with the city to bring it to the finish line," said Gavin Longer, the company's revenue manager. In May 2023, the Longer family — which operates several hotels along Milan Road (U.S. 250) across Erie County — along with Fairmount Properties publicly announced a redevelopment plan within Jackson Street's parking lot behind the Sandusky State Theatre. The space totals about 1.4 acres. The plan calls for creating: • A Hampton by Hilton hotel property with 76 rooms featuring a rooftop bar and restaurant • Street-level event space/conference center ranging in size between 5,000 square feet and 10,000 square feet • A parking garage with roughly 400 parking spaces the public can also access Standing 10 stories tall, the hotel and event space/conference center would go above this parking garage. Yet construction vehicles, workers and materials can't be found anywhere on the site, meaning there's been no visible progress there. So what's up? Understanding the memo A document known as a memorandum of understanding, which effectively granted exclusive negotiating rights between these private businesses and Sandusky's government, recently expired. "At expiration, the development team indicated their desire to continue to pursue financing opportunities that will require additional time," according to an internal memo sent to city commissioners. Officials pegged the project's cost at $50 million, an expense both private entities — and not Sandusky's government, largely backed by local taxpayers — must cover. The memo alluded to how city commissioners "will be presented with the memorandum of understanding extension request" sometime before June. Officials noted the city is still "considering" this extension. No final decision has been made. Since the exclusive negotiating window ended, and no extension has occurred, development can't occur at this site until a new agreement is reached. If the city grants an extension, then developers intend on getting back to work. They previously stated construction would take two full years. Speaking to the city Colleen Gilson, the city's community development director, provided some answers to questions about this project as it relates to Sandusky's government: Q: What is the status of this project? CG: Project developers Fairmount Properties and North Coast Inns remain highly interested in developing the project site. The project developers have requested consideration of a six-month extension to their memorandum of understanding to continue project due diligence. Q: What are the main holdups? What is being done to address that? CG: The original (document) issued by the city in 2022 prioritized the development of a hotel and conference center. The city indicated an openness to additional development to be proposed in submissions from developers. The selected development team proposed additional components, mainly residential and commercial, that resulted in financial modeling, which projected the need for a greater amount of subsidy — local, state and federal sources — than the project could likely attract. The development team is proposing the elimination of residential development and a decrease in commercial space and intends to model financial projections accordingly. The development team is engaging in an updated study to best guide the sizing of the hotel and conference center structures. The study is commencing in the next few weeks and is expected to turn around results in 60 days. Simultaneously, the development team will be exploring the use of (other) financing for the parking garage structure. Q: Is there an updated investment cost? CG: New estimates for project costs are not available at this time. Should the city move forward with an extension of the memorandum of understanding, the project development team will focus on new projections. Q: Why is this project important to the city? A: The project would activate a space that is currently single-use as a parking lot into a multi-use development. The project will retain the ability to park cars, public space included, as well as meet the growing demand for hotel rooms in the city of Sandusky. Further, the addition of a conference center will expand Sandusky's ability to become a destination location for trade shows, professional business conferences, private events, such as weddings, and other like celebrations. All of this activity increases the tax base and impacts existing local retail with an increase in visitors to the city. Bio blast Here's some information on the two entities seeking to develop a hotel in downtown Sandusky: • Founded in 1986, North Coast Inns describes itself as a family-owned management and development company headquartered in Sandusky. It's run by the Longer family, a franchisee operating several hotels along Milan Road (U.S. 250) in Erie County: Country Inn & Suites by Radisson Sandusky South in Milan, Hampton Inn & Suites in Sandusky and Milan, Tru by Hilton Sandusky and La Quinta Inn by Wyndham in Sandusky. • Founded in 1998, Cleveland-based Fairmount considers itself a well-respected industry leader across multiple real estate platforms. Its portfolio is packed with many public-private partnership projects, which include revamping The Flats East Bank in Cleveland.