Convention hotel bid dies; Roseville looks at options
Sacramento Business Journal - by Mark Anderson Staff Writer
A company that had been granted exclusive negotiating rights to develop a convention hotel in Roseville has run out of time, and the city is talking with another developer about new options.
Roseville leaders for years have sought a developer to build a full-service hotel and convention center, and three times the city has entered into exclusive negotiations with developers to come up with a proposal.
Richland Properties Inc. -- the company that previously owned land now being developed into the Galleria at Roseville mall -- was the latest hope. But Richland failed to submit plans in October. The city then waited for late plans until the end of December, and still nothing came.
Now, the city is putting together a meeting of its hotel commission and a North Dakota-based hotel builder, Tharaldson Development Co., to talk about getting more rooms in Roseville.
In the past three years, six new hotels with a total of 625 rooms have been built in Roseville. Half were built by Tharaldson.
Tharaldson is now considering building a couple more hotels on land overlooking the south end of Highway 65 at Interstate 80.
If Tharaldson goes ahead, it would add another 260 rooms, representing an investment of more than $23 million.
The Fargo, N.D., hotel company built three Marriott-branded hotels in Roseville two years ago. Each one has beat the company's initial projections since it opened, despite ongoing road construction in front of the inns.
The city wants its hotel commission to meet with Tharaldson's local team within the next two months.
Tentative plans for the two new Tharaldson hotels call for a 130-room Springhill Suites by Marriott, and a 130-room Homewood Suites by Hilton Hotels Corp.
Springhill is an all-suites version of a Fairfield Inn by Marriott. The rooms include a small refrigerator, a microwave oven, plates and utensils. They're popular for business travelers on extended visits.
Homewood Suites is a high-end, extended-stay property. The typical guest checks in for more than four days and sometimes for months. The rooms have kitchens and separate bedrooms, and the property includes laundries.
"There is a lot of growth out there. The total of room nights in that area is growing and the properties that are out there are generating new demand," said Ken Kuchman, analyst with PKF Consulting in San Francisco.
"If they don't build them," he said, "someone will."
Tharaldson, a chain that owns more than 300 hotels across the West, has the ability to build quickly. The firm acts as its own general contractor, has its own construction workers, and manages its own inns.
The firm also has the ability to build using cash, only needing financing to take out long-term loans on completed properties.
The Richland proposal called for a convention center hotel on the west side of the Galleria, opposite where Tharaldson might build.
It isn't clear why Richland decided not to go ahead.
Even before the deadlines passed, Richland's exclusive negotiating rights were in question. In its initial proposal last April, Richland named Sacramento-based Fulcrum Capital Corp. as one of its development partners.
But Fulcrum left the Richland team last summer, altering the exclusive negotiations.
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