Marriott-flagged hotel in Elko funded with USDA guarantee
July 19, 2010
A group that’s developing an 85-room hotel in northeast Elko says the city’s marketing and tourism efforts will benefit from having a Marriott-branded property in the region.
Ruby Vista Lodging Associates LLC, headquartered in Provo, Utah, recently broke ground on the Marriott TownPlace Suites, an extended-stay property at the high end of mid-class business hotel accommodations, says Nate Taylor, vice president of development for Ruby Vista Lodging Associates.
“There is a demand for more rooms in that category, and we felt like this brand would do well to service travelers along I-80, along with Newmont and Barrick,” Taylor says. “It seemed like there was enough economic diversity and a sizable base that it made sense.”
The hotel at 2625 E. Jennings Way off exit 301 is being built by general contractor Richardson Van Leeuwen of Salt Lake City. The hotel will employ between 25 and 30 upon its completion in June of 2011, and about 40 tradesmen will be employed during construction, Taylor says.
The deal was presented to Ruby Vista Lodging through Elko residents Randy and Annette Kerr, owners of the land where the hotel is being constructed. The Kerrs have an ownership stake in Ruby Vista Lodging.
The Marriott property will be the first of the chain’s flag between Reno and Salt Lake City.
Recommended Stories For You
“We had a sense that there was an opportunity in that market and a hole for an extended-stay hotel and something in the upper end of mid-class hotel properties,” Taylor says. “Elko has reached out to try and increase tourism, and having another hotel of this class will help them in their marketing efforts. One more hotel will be helpful to the city and its economic development plans.”
The hotel will be managed by Zions Hospitality, also based in Provo. Zions Hospitality manages nine properties in Utah, Idaho, Wyoming and Nebraska. This will be the company’s first venture in Nevada.
Meadows Bank of Las Vegas loaned $6 million for the project. Ruby Vista had pursued financing for the hotel since February of 2009 and had gone through several lenders before Meadows Bank agreed to back the loan.
“It wasn’t a lack of credit, or equity in the project, or that the borrowers didn’t have good balance sheets,” Taylor says. “The project was viable; it is just a tough lending environment.”
Cal Regan, senior vice president of Meadows Bank, says that the U.S. Department of Agriculture’s Business and Industry Guaranteed Loan Program agreed to back 70 percent of the loan.
“Anytime you are doing a ground-up construction deal of this size it is not easy to get it approved,” Regan says. “The fact that the individuals behind this have other hotels they own and operate is what really tipped it in favor of approval. They are very experienced in this line of business, and that is what the bank looked at in underwriting the transaction. But without the USDA guarantee we would not have been able to do the loan.”