Burnsville Getting a New Hotel?

An investors’ group is pitching a hotel for Burnsville’s Heart of the City, a long-hoped-for ingredient in the downtown redevelopment area.

“A hotel has absolutely been in the picture from the start,” said Skip Nienhaus, Burnsville’s economic development coordinator. The site, a vacant 1.75-acre parcel near the Burnsville Performing Arts Center and parking deck, was acquired by the city in 2001 to pave the way for a hotel.

Since then, development proposals that included a hotel have come and gone. The last was almost five years ago, when a developer backed out of plans to build a mixed-used complex that would have included a hotel on a site that included the vacant parcel and the lot where the Mediterranean Cruise Cafe eventually was built.

City officials have declined to identify the hotel investors until a purchase contract for the land has been finalized. Nienhaus said that’s expected late this year or early in 2013. City officials have said the purchase would require the investors to develop a hotel on the site.

Nienhaus said the investors haven’t specified a brand yet, but have said it would be a full-service hotel. That’s something that currently is in short supply in Burnsville. Just one of the city’s nine hotels — the Best Western Premier Nicollet Inn — is a full-service hotel with a restaurant, according to the Burnsville Convention & Visitors Bureau.

It also would be the first hotel built in Burnsville since 1998. Steve Sherf, a Twin Cities hotel industry consultant, estimates that about two-thirds of Burnsville’s hotel rooms are more than 25 years old. “If somebody could pull off a hotel development in Burnsville, it would really stand out,” he said.

Burnsville was on the sidelines during a wave of hotel development that added more than a thousand rooms throughout the Twin Cities in the mid- and late-2000s. The recession largely ended the building boom and also resulted in the closure of some hotels, including the Burnsville Inn and Suites, which was shuttered about a year ago. The hotel, which opened as a Howard Johnson in the early 1970s, has been demolished. The city has gotten no proposals to redevelop the site, east of Interstate 35W and north of Hwy. 13, Nienhaus said.

Despite that, Burnsville’s overall hotel market has rebounded, said Amie Burrill, executive director of the convention bureau. She said the funds the organization receives as its share of the city’s lodging tax are up, an indicator that hotel revenues are increasing.

Burrill said the city’s proximity to I-35W and the Minneapolis and St. Paul downtowns, as well as easy access to such attractions as the Mall of America, Valleyfair and the Minnesota Zoo, help support the hotel market.

City officials have said they also believe that the Burnsville Performing Arts Center, which the city built as part of the Heart of the City project, may be boosting the hotel market. The arts center was never expected to make money, but last year it lost the least money of any year since opening in 2009. This year it’s also expected to record lower-than-budgeted operating costs, according to city spokesman Marty Doll.

“There definitely is demand for more hotel rooms in Burnsville,” Burrill said. The city’s supply of rooms has declined not just from the closing of Burnsville Inn & Suites but because of recent renovations at the Hampton Inn and the Fairfield Inn & Suites, where some smaller rooms were combined to make larger ones, she said.

Sherf noted that most hotel chains have begun to require their franchisees to renovate and upgrade. That’s one more reason he believes a newer hotel would could do well in Burnsville. “After a year or two, some of those older hotels in Burnsville that haven’t been upgraded will look even more obsolete,” he said.

Sherf also said the timing could be right because overall hotel occupancy is back up to pre-recession levels. “Room rates are up too,” he said. “That’s why you’re beginning to see some signs of development.”

The stronger market hasn’t set off a hotel building boom in the suburbs, but a few new projects have cropped up. The biggest is the 500-room Radisson Blu under construction at the Mall of America. Others have been proposed or are in the works in Bloomington, Minnetonka, Wayzata, Excelsior, Rosemount, Brooklyn Park and Oakdale.

Source: Minneapolis St. Paul Star Tribune