Ducatista wrote:green union terrace chair, you've jacked up the offending room price from $300 to $400 since last fall. New info?
The former price had more with what I had heard from other local hoteliers. I did some research (googling) and found that a very loose rule of thumb to find room rate is:
(Project Cost) / (Number of Rooms) / 1000 = Average room rate.
That assumes you're lumping in all the amenities and extras like restaurants, parking, swimming pools, ballrooms, etc.
The cost given in the most recent article is $98 million. However, this will include "up to ten luxury condos." Let's be generous and say they build all ten at a cost of $1M apiece (which I think is high, unless they're selling for $2M). That brings the hotel portion to $88M.
The biggest change in financing is that there's no TIF. So you must include the whole "public component," the plaza, the grande staircase, etc., into the cost. According to Dunn, TIF would have covered half of the public component and that would have been "off the books," paid for by a loan from the city (in turn paid off by property taxes in the TIF zone). But now that will all have to be paid for by room charges. So the back of the envelope calculations are:
($98M project cost - $10M condo cost) / 189 rooms / 1000 = $466 average room rate.
Because of code phrases like "The group is willing to take a lower rate of return to make it work," maybe they're able to get that room rate down a bit. Also understand that if they have suites that are far above average price, the rest will also come in under the average.