City, UMW Foundation teamwork on hotel financing cited
The city of Fredericksburg and the University of Mary Washington Foundation were recognized for their creative financing of the $15 million Hyatt Place hotel project in Eagle Village with a 2013 Community Economic Development Award.
The award was presented to the two groups at the Virginia Economic Development Association’s spring conference on March 29, in Charlottesville.
Financing for the hotel was enabled by the city’s Tourism Zone program, the new Virginia Tourism Development Financing Program and its developer, the UMW Foundation.
The Fredericksburg Department of Economic Development and Tourism nominated the project for the award.
Karen Hedelt, Fredericksburg’s director of economic development and tourism, submitted the project for consideration in January.
She said the unique funding mechanism for the project made it stand out.
She said the idea of a national hotel in the vicinity of the hospital and university was appealing to the city because there was not one there already.
She said it is a “very nice extension” of Eagle Village, the city’s first mixed-use development.
The hotel will include 93 studio rooms or suites as well as several meeting and conference rooms available for public rental.
“It’s a logical progression,” she said.
Fredericksburg’s City Council approved a $310,000 grant for the hotel in 2011. The city and foundation worked with the Virginia Tourism Corporation to secure a $310,000 state matching grant for the hotel through the Virginia Tourism Development Financing Program, the first one approved since the program’s creation.
The program provides economic incentives to developers of projects that benefit tourism and business.
The city and state grants, ultimately funded by sales tax revenues generated by the hotel, allowed the foundation to close the final gap in financing.
“When Gov. McDonnell created the Tourism Development Financing Program in 2011, we knew right away we wanted to work with our partners at the city and be the first developer in the commonwealth to adopt and utilize this creative financing structure,” Jeff Rountree, CEO of the UMW Foundation, said in a press release. “Thanks to this program, the UMW Foundation’s Hyatt hotel will create new jobs in the region, generate new revenue for Fredericksburg, provide a needed hospitality service and revitalize an underutilized commercial site within the city.”
During the next decade, the hotel is expected to generate $3.27 million in tax revenue for the city.
According to a release from UMW, the hotel currently generates 100 construction jobs. After opening sometime between mid-October and the first week in November, it will support 55 new jobs, said Rountree.
Hotel guests will have a short walk across the U.S. 1 pedestrian bridge to the UMW campus.
Lindley Estes: 540/735-1976