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Memo <br />To:Sean Sullivan, Economic Development Manager <br />From:Jason Aarsvold, Ehlers <br />Date:1-2-20 <br />Subject:Cobblestone Hotel Request for Assistance <br />The City of Ramseyreceived a request for assistance to construct a 60 room Cobblestone Hotel <br />and Suites project within the COR areaon City-owned land. The developer is requestingthe <br />City write-down the costof the land to $1to make the project financially feasible. <br />reasonable and within industry standards. Ehlers conducted a thorough review of the <br />nticipated <br />revenues, and expenditures were represented appropriately.The table below depicts the <br />sources and uses of funds for the project as proposed by the developer. <br />SOURCES <br />AmountPct.Per Room <br />First Mortgage5,000,00062.7%83,333 <br />Developer Equity2,970,00137.3%49,500 <br />TOTAL SOURCES7,970,001100%132,833 <br />USES <br />AmountPct.Per Room <br />Acquisition Costs10.0%0 <br />Construction Costs5,800,00072.8%96,667 <br />Furniture, Fixtures, & Equipment1,385,00017.4%23,083 <br />Professional Services265,0003.3% 4,417 <br />Financing Costs170,0002.1% 2,833 <br />Developer Fee250,0003.1% 4,167 <br />Cash Accounts/Escrows100,0001.3% 1,667 <br />TOTALUSES7,970,001100%132,833 <br />Analysis <br />Generally, this project meets the expectations of a limited service, or upper midscale, hotel <br />project regarding the financing structure, projected revenues, developer fee, and on-going <br />operational costs. Following are our findings from the analysis completed for the project: <br />The Developer proposes to finance the entire hotel project with a combination of equity <br />anddebt. The proposed financing includesjust over 37% equityand62.7% debt in the <br />form a first mortgage. For a project of this nature, we would expect to see an equity <br /> <br />