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County, city, landowner to fund hotel study

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Morgan County, Morgan City and a local landowner are chipping in to revive the possibility of a hotel on Commercial Street.

After funding two other hotel feasibility studies in the past seven years, Morgan County Councilmembers wanted to know at their May 3 meeting what was different this time around.

The short answer is the county has a new economic development consultant who has been flexing his network muscles.  Marlin Eldred began a one-year contract with the county in December for economic development consulting services after 14 years of experience.

The study to be conducted by Benton and Associates would cost $10,750 and should be completed in July.  The city has agreed to pay a third of the cost, the county’s Business Expansion and Retention (BEAR) funds will pay another third, while land owner Scott Parkinson has agreed to pay the remaining third.

Once signed, the contract would be between Morgan County and Benton.

The city has stated that if a hotel were to come, they would provide sewer for it, Eldred said.  The city is struggling with limited sewer connections available for future development, city councilman Bill Cobabe said.

“If we move forward, the city will get more involved in the process,” said Eldred, who has been cooperating with city economic development efforts as well.

Eldred said he has reached out to Western State Lodging, which owns 30 hotels in the Western United States.  While they were not interested in a project like Morgan’s under 100 rooms, they referred Eldred to PEG Development.

PEG has a “sweet spot” for projects like Morgan’s, with between 60-100 rooms, Eldred said.  They have worked with Hilton Garden Inn and Marriott, and have had Morgan on their radar.  The developer said Morgan may be a good fit for a Hilton Tru, a newly branded midscale market that competes with Best Western for smaller rooms geared to one-night stays.

“It would bring customers off the freeway and get them back on for traveling,” Eldred said.

But PEG isn’t ready to jump in quite yet, because a 2009 hotel feasibility study has numbers that are just a hair too low.  But those numbers were based on an economy in a downturn, Eldred pointed out.  He is confident that an updated study would show better numbers.

The 2009 study predicted a 2014 average daily rate of $97 per room with a 72 percent occupancy.  PEG is looking for $100 average daily rate and 70 percent occupancy and would like to see a McDonald’s on the nearby corner.

“We are hoping to come in close to that” with the new study, Eldred said.

“PEG said if we could get an updated study, they would be willing to look at a project in Morgan.  That doesn’t mean they are going to guarantee it,” Eldred said.  “If our project would not fit, they would help us look at up to five others interested in Morgan.”

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