To be built at the old Welsh Motel site.
Posted Friday, October 20, 2023 8:59 am
By Priscilla Waggoner, Courier reporter
ALAMOSA — By unanimous vote, the city council of Alamosa has authorized Heather Sanchez, city manager, to sign a development agreement with Alamosa businessman Manish Patel for the construction of a 90-room downtown hotel to be located on the former site of the Walsh Hotel.
The agreement is the culmination of negotiations that began between the city and Patel in 2019 when he indicated his strong interest in building a hotel downtown. The onset of the pandemic brought those negotiations to a halt but, as the economy returned to normal, Patel indicated an interest in resuming negotiations.
“A downtown hotel is mentioned several times in the Downtown Plan,” Sanchez told the Valley Courier, “generally as an anchor and way to draw visitors downtown.” She then referred to the page in the plan where a downtown hotel in that location was specifically indicated as a preference by members of the public, which did not include city staff or members of the city council.
It is too early in the process for specifics of the hotel to be known, but Sanchez shared with council that Patel is shooting for a hotel with a 90-room capacity and is currently considering plans from the Hyatt Studios brand and Staybridge Suites. The plan also sets a 50-foot maximum for any new building built downtown.
The development agreement involves three pieces of property already owned by the negotiating parties — specifically, the city-owned 45,000 square-foot lot where the Walsh Hotel (currently in demolition) once stood and the 18,750 square-foot lot (known locally as the Pink Elephant site) Patel owns that is directly east of the Walsh on the other side of State Avenue. Further to the east, the Pink Elephant site is bordered by another lot, owned by the city of Alamosa and measuring 11,500 square feet. Combined, the Pink Elephant site and the lot to the east total 30,100 square feet, all unpaved and currently used for parking.
According to the development agreement, the city will deed over the 45,000 square foot lot to Patel. In exchange, Patel will deed over the Pink Elephant 18,750 square foot lot, giving the city ownership of that entire 30,100 square foot area.
Patel further agrees to construct a parking lot on the 30,100 square foot land with the agreement that some of the parking spaces will be dedicated, as needed, to hotel use from 3:00 p.m. to 9:00 a.m. the next day.
In return, the city agrees to reimburse Patel for construction of the parking lot from the new sales tax funds paid by the hotel. In that way, Sanchez emphasized, the city is not using any funds from the existing budget to repay Patel but, instead, reimbursing him for the construction from a portion of the sales tax funds generated by the hotel he built.
Depending upon the number of parking spaces required by code, how many of those parking spaces will be located on the hotel property and how many will be needed on the parking lot across the street, a cap will be set for the amount Patel will be reimbursed for the cost of construction.
In speaking to council, Sanchez acknowledged that the agreement may seem, at first glance, to be inequitable — deeding 45,000 square feet of land to Patel and being deeded 18,750 square feet of land in return.
But, she said, that cost will be offset by the influx of new revenue the downtown hotel will create. Using an algorithm accepted as an industry standard in calculating the economic impact of a hotel on the surrounding economy, it’s anticipated that hotel construction and operation — for example creation of new jobs — will have a direct positive impact of $21.9 million on the city. Once multipliers are applied as those dollars are circulated in the local economy, that projected impact increases to $39.2 million.
In the following years, the direct impact to the local economy is estimated to be $11.9 million with a total estimated impact, each year, of $20.2 million.
Once Sanchez had completed her review of the development agreement, Manish Patel addressed council, stating he had lived in Alamosa for 15 years. He believes the hotel will be “good for the community, good for the downtown area and good for economic growth” in “the city that is [his] home.”
As Deacon Aspinwall, planner for the city of Alamosa, later told the Valley Courier, the development agreement also includes deadlines, including a July 2024 deadline for plans to be completed and a July 2027 deadline for the hotel to be ready for occupancy.
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