Hoteliers weigh in on city-proposed hotel

BOULDER – Plans for a new convention center and five-story hotel in Boulder are getting at least an initial welcome from some local hoteliers.

“The competition is OK by me,” says Dan King, who manages the Boulder Outlook Hotel & Suites on 28th Street in Boulder. “Sometimes it’s helpful to the other hotels when a new one comes in with higher rates.”

Reportedly, the average price for a room at the hotel located next to the convention center would be about $150 a night. However, King says that price is “in the neighborhood” of other existing nearby hotels in Boulder.

As a proposed plan stands now, the center would surround the Boulder Dushanbe Teahouse and the Boulder Museum of Contemporary Art on a city-owned parcel at the corner of Canyon Boulevard between 13th and 14th streets. It would feature a 15,400-square-foot exhibit hall, a 20,000-square-foot ballroom and a five-story hotel.

Molly Winter, director of downtown and University Hill Management Division and Parking Services for the city of Boulder, calls the center “a new product.”

“It would be a communitywide conference convention center, and the whole idea is to bring events that aren’t able to meet here now such as statewide associations and business meetings that need more space than is currently available,” Winter says.

Dan Pirrallo, general manager of the Millennium Harvest House in Boulder, says, “Any time new competition comes into the market, no matter what kind of competition, it’s going to have an impact on the market. But over the last two or three years, occupancy has grown and demand has continued to grow, so I believe there’s room.”

Pirrallo says there are also “a number of properties” that will be coming out of the market. As an example, Denver developer Urban Frontier LLC has proposed replacing the Best Western Golden Buff Lodge at 28th Street and Canyon Boulevard with a four-story structure with shops, offices and condominiums by late 2008.
“If that’s true, then that will create fewer rooms, less supply,” Pirrallo says.

A report has found that a conference center could bring up to $10 million a year, money spent at restaurants and shops. But that report also predicts the center itself would actually lose about $265,000 in its first year. The report states that over the first four years of operations, that deficit could drop to about $158,000 annually.

That deficit doesn’t sit well with Bruce Porcelli, head of St. Julien Partners, the owner group behind the St. Julien Hotel.

“I don’t have a problem with a private enterprise coming in and creating more competition,” Porcelli says. “But I am sensitive to the idea of the center being subsidized by the city and tax dollars. That’s not a level playing field.”

Porcelli also questions if a center could bring in $10 million a year.

“I’d say that estimate is optimistic,” Porcelli says. “That’s about 1,000 visitors week in and week out, spending $200 each.”

Winter says all the costs have yet to be worked out, but added that “typically conference centers do not make money within the operation of the facility itself.”

She adds that the only way Boulder will proceed with a conference center is if the anticipated revenue from related spending of conference attendees at hotels, restaurants, retail shops and the extra tax revenues to the city generated from that spending covers the costs of the deficit “and hopefully brings in more revenue.

“This is spending that is not currently in Boulder; these would be new dollars that have relatively little ongoing impacts on the infrastructure of the city,” Winter says.

She adds that officials expect to approach the city council in the first quarter of 2007 “to get direction on where to go.”

Susan Graf, president of the Boulder Chamber of Commerce, says she feels “fairly comfortable” that a new center and hotel will not negatively impact existing hotels.

“From what I’ve seen, the reports say that it will draw more attendance than the new hotel could handle so there’d be a spillover into existing hotels,” Graf says. “I think it’s a rising tide that could lift all the boats involved.”

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