Perry City Council holds work session to discuss purchase of Hotel Pattee with PED
PERRY -- The Perry City Council met on Thursday, Jan. 14 for a work session to discuss the opportunity for the City of Perry to participate, together with Perry Economic Development, in the purchase of the Hotel Pattee and La Poste Properties from Maxwell Hospitality, LLC and HPLP, LLC. The work session provided an opportunity for the Perry City Council to become familiar with the purchase opportunity, roles of partners and key associated considerations.
Perry Industries, Inc. (“PEDI”) together with Perry Economic Development, Inc. (PED) are currently pursuing the purchase of the Hotel Pattee and La Poste assets. The groups are focused on executing a public/private partnership model to both fund the purchase and subsequently manage the ongoing operation of the properties. Led by Tom Burkgren, Perry Industries, Inc. President, representatives from the two local economic development groups presented information that would be relevant to council member’s consideration in evaluating the potential of the city’s financial and ongoing participation in the acquisition.
In September of 1993, Howard and Roberta Ahmanson became owners and developers and completed purposeful renovations to make the hotel one of the finest boutique hotels in the U.S. The property remains a very significant economic asset to Perry, bringing as many as 65,000 people in one year since renovation, and increasing the economic base between five and 15 million dollars according to social economists using federal multipliers. Since the Ahmanson’s sale of the Hotel Pattee in 2007, the hotel has known one hospitality corporation and two different family models of ownership. With the current pandemic, the opportunity to provide long-term sustainability for the hotel has presented itself.
The Hotel Pattee and its companion facility, La Poste, continue to prove themselves as critical parts of the economic, business and social foundation of the Perry community. For that reason, the acquisition of Hotel Pattee and La Poste provides a unique, one-time purchase opportunity for the Perry community, through an approximately equal public /private partnership with the City of Perry and PED, said Richard Jones, Perry Economic Development, Inc. President.
Tom Burkgren added, “We believe such a public /private partnership is the best way to move forward to secure and operate these critical facilities on a local basis for Perry."
"The economic development groups are focused on executing a funding model for the purchase and operation of the two properties that would include a combination of public funding and private contributions," Burkgren continued. "While the many details of governance, ownership transition, and ongoing management are being worked through, the time sensitive issue of a purchase opportunity is before us. While the ongoing operation of the hotel is not currently in imminent danger, this purchase represents a generational opportunity to create local control and ownership of these critical local facilities for the foreseeable future.”
It is anticipated that the Perry City Council will formally consider the city’s support and participation in the effort at a council meeting in the month of February.
Perry Economic Development included a set of questions and answers related to the possible purchase of the Hotel Pattee and La Poste:
- How does the new public/private partnership expect to make this a successful venture when past ownership efforts have been economically challenging? We believe this partnership will include economies of scale and local control of profits as well as expense reduction through utilizing existing resources. The variety of financial resources of the City and its ability to secure applicable grant funding will enhance the sustainability of this endeavor.
- Why shouldn’t the Hotel be owned and operated privately like it has been in the past without taxpayer involvement? Even with private management, history has demonstrated that other public and private resources have been needed to support the successful overall economic contribution of the hotel. We believe the proposed public/private partnership will enable the most effective and efficient utilization of local funding, and it will secure critical assets for the long-term future of the community.
- How will non-public funds be secured to support the purchase of Hotel Pattee and La Poste? Perry Economic Development is willing to provide a portion of the purchase funding and has begun discussions with private sources of supplemental contributions. With necessary additional public support, the economic development group is optimistic about its ability to secure necessary funding for the project.
- What is the timeline for this project? The current timeline is focused on completing a purchase of the hotel and La Poste assets sometime in the first trimester of 2021.
- How will the hotel and La Poste be managed? Several ideas and examples from other communities are being studied in parallel with the effort to secure necessary funding for the project.
- Is this going to be done “on the backs” of the local taxpayers? We do not believe taxpayers will bear the burden of this effort given the expected local economic benefits. However, the quality ongoing management of the properties and the services provided will be critical to both economic and social enrichment.
- Do other communities own hotels and are they successful? Yes, we have researched several communities that successfully have owned and operated local hotels and meeting/entertainment venues. As we believe has been the case in Perry, the overall local economic benefit generated exceeds the risk involved.
- If this public/private partnership purchase effort is not successful, will the Hotel Pattee and La Poste be closing? Based upon our ongoing discussions with current ownership, we do not have reason to believe that either property is in imminent danger of closing. However, it should be noted that this effort would further secure the long-term stability and viability for both properties.
- Has a purchase price for the two properties been determined? Key confidential elements of a purchase agreement between Perry Economic Development and the ownership of the properties have been negotiated. However, moving forward with such an agreement is based upon key contingencies such as securing the necessary funding for the project.