.

Arrowhead Hotel a No-Go in Tough Economy

The current economy would not support hotel development at Arrowhead Golf Club, consultants say.

The Wheaton Park District will hold off on plans to build a hotel at Arrowhead Golf Club.

A consultant's report concluded that in an already-saturated market during a poor economy, a hotel investor's return would not be ideal.

In July 2011, the park district partnered with developer Fairway Suites, allowing the firm to represent the district in marketing the Arrowhead property to hotel chains such as Hilton or Hyatt.

In a Nov. 12 letter to park district staff, Fairway President Joe Ross wrote that while now is not the right time, the hotel industry should pick up in 2013 to 2016.

"While the economy is the major reason for caution in the hotel development business, the forecast from all the major sources who track the hotel industry advise that 2013 thru 2016 should show significant industry growth due to less than half of one percent growth in the past four years."

Normally, hotel development is five percent to six percent annually, Ross wrote. "At some point the pent-up demand will spur new development."

He said he hopes to "steadily and cautiously stay the course" because of the great facility at Arrowhead. 

Park commissioner and former board president Ray Morrill said he thinks the hotel is an opportunity that should be looked at again in the right economy.

Consultant Chuck Pinkowski wrote in the report a hotel at Arrowhead would succeed in weekend business at 85 percent occupancy during the busy golf, wedding and event season April through September. During the same months, however, weekday business would lag at 65 percent occupancy. Further, the hotel would be at 65 percent occupancy everyday during the offseason, according to the report.

Let Patch save you time. Get stories delivered to your inbox—sign up for our email newsletter. Fast signup here. You can also like us on Facebook.

Though projected returns for an investor are discouraging, Arrowhead Restaurant and Bar could make more than $830,000 in additional revenue from hotel guests, even at 65 percent occupancy. 

Based on Pinkowski's estimates, if hotel guests eat 25 percent of of their meals at Arrowhead, the park district would make more than $400,000. If they walk over to Arrowhead for 75 percent of their meals, the park district could make more than $830,000, according to a staff report. 

Staff wrote in a report to board members, "a future board may wish to review this concept opportunity should a franchisor, lender and developer approach them together with a firm offer that includes a failure backstop for the district."

Benard said to move forward with the hotel concept, a franchisor, developer and lender all need to come to the park district with a plan that includes the failure backstop. 

Related:

  • Study: Arrowhead Hotel Would be 'Questionable' Venture
  • Should the Park District Bring a Hotel to Arrowhead Golf Club?
  • Park District Exploring Idea for Hotel at Arrowhead
  • Park District Commits to Bring Hotel to Arrowhead
billy November 15, 2012 at 02:10 PM
Sure divide up the golf course into commercial lots. Golf challenge will be playing around the new developments. Mark this idea for the new Milton Township Auditor for assess the profit making businesses and lots for increasing the tax base. Oh well the power-less public's park land is going, going, gone to commercial businesses.
DAN RHAME November 15, 2012 at 04:31 PM
They are assuming there will be "At some point the pent-up demand will spur new development." So these forward thinkers don't see a weak economy that can get weaker real soon?? And they get paid for researching and the writing these recommendations? Stock up now on the rose colored glasses.
John J November 15, 2012 at 08:27 PM
So how much has this little exploratory gambit cost us - the taxpayers? Let's see...from a 2011 Patch article we have the following comment regarding the Fairway arrangement: "The park district, however, is not obligated to any expenses related to the project, according to the letter of commitment. " Then in 2012 we find that: "The Wheaton Park District earlier this month hired a consultant to conduct a study of the area to determine whether leasing land at Arrowhead to a hotel chain would benefit the park district." So what's the story here? One possible scenario: Fairway comes in with a no-go and the self-appointed Park District Employee/Board Member in charge Building His Empire didn't want to take no for an answer so decided it would be a good idea to spend taxpayer's money to fund a consultant study that would support his folly. Hmmm....isn't that what the Downtown Wheaton Association did viv-a-vis the Wheaton Grand Theater? And, how much taxpayer money was wasted on studies for that boondoggle. And, gee, I think the WPD squandered taxpayer $$ on that as well.
Charlotte Eriksen November 15, 2012 at 11:32 PM
John, it wasn't Fairway that came in with the no-go. The consultant came up with that (Fairway could have thought the same thing—but their president has said he's still interested in putting a hotel there when the time is right). The park district hired the consultant to see if it'd be worth pursuing. When the $7,600 report concluded it wouldn't be, the director recommended they drop it and move on.
Major Tom November 16, 2012 at 02:20 AM
As a person who traveled over 90 per cent for over 25 years in sales, why would I stay in an isolated area? Makes no sense to me

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »