Heidel House project gets examination by Plan Commission

The proposed redevelopment of the Heidel House Hotel property would preserve the historic hotel, while making it more financially viable, according to a presentation to the Green Lake Plan Commission Monday.

The development would add 49 two- and three-bedroom lodging units, new indoor and outdoor pool amenities and a fitness center.

Lance Schaefer, president of Everett's Hospitality, outlined the proposal for Lots 1 and 2 of the property during the meeting. The company has entered into a purchase agreement with Green Lake Hotel Group to acquire the lots, with the transaction dependent on approval of the development proposal by the city.

“The goal of this redevelopment is to preserve the existing Heidel House structure,” Schaefer said.

The proposal focuses primarily on Lot 1, where the planned unit development (PUD) request would enable hotel and multifamily residential uses on the same parcel.

Schaefer said the redevelopment is intended to replace amenities and lodging capacity affected by the removal of the West Wing, also known as the “Mariner Building,” while making the 12-acre property financially sustainable for the future.

The plan calls for a three-story addition connected to the southwest corner of the existing Heidel House building. The new structure would rise three stories above the level of Waves Restaurant and would be slightly shorter than the existing hotel.

The addition would contain nine residential lodging units with two or three bedrooms each. Its main level also would include an indoor swimming pool, a fitness center and back-of-house laundry facilities serving the lakefront buildings and the condominium building north of the existing hotel.

A new outdoor pool and pool deck also are planned. The pool would move slightly east of its current location because of the property line, while the revised deck would be 10 feet farther from the shoreline than the existing structure, according to Schaefer.

Schaefer said the location would provide convenient access from the hotel and nearby food and beverage outlets while preserving the experience of visitors using the waterfront ceremony site, which has become a popular wedding venue.

The second major component would be a condominium building located a little more than 100 feet from the existing hotel. Schaefer said the goal is to include 40 two- and three-bedroom units in that building.

Combined with the nine units in the addition and the 41 rooms in the existing Heidel House, the project would provide a total of 90 lodging units.

Schaefer said the larger accommodations reflect changing travel preferences, particularly among families and groups seeking kitchen facilities and multiple bedrooms.

“They want a couple of bedrooms; they want kitchen facilities,” he said, describing travelers who want the flexibility to prepare breakfast or lunch while still having the option of dining at the resort.

The units also would enable larger groups to stay together rather than book several traditional hotel rooms. Schaefer said a unit accommodating eight or more people could offer a competitive alternative to renting three or four hotel rooms.

He also noted the approach could help the resort generate higher room revenue and maintain city room-tax revenue despite having fewer lodging units than the property currently offers for public rental.

The redevelopment would use a condominium ownership model in which the new units could be privately purchased but would remain connected to the resort's rental operation.

Schaefer said the condominium documents would be structured to encourage owners to make their units available through the resort's rental program. Owners would not be prohibited from occupying their units year-round, but associated fees and rental-program requirements would make full-time private use less attractive.

The rental operation also would maintain control over furnishings and equipment to ensure consistent guest experiences. Schaefer said owners would not be able to independently furnish and market their units outside the resort's system.

Rental income would be pooled under an evolving model used at some other resort properties, he said, helping address concerns about the fairness of rotating rental opportunities among owners.

Plan Commission members questioned how the arrangement would affect room-tax collections. Schaefer clarified that room taxes would apply to transient rental revenue rather than automatically being collected for every day a unit was privately occupied or left unrented.

The proposal also prompted discussion about the city's tax incremental financing district and the financial obligations associated with the property. 

Schaefer said the redevelopment had been evaluated partly on its ability to provide a more sustainable business model than simply expanding the existing hotel's room count. He said the cost of new construction and the resort's seasonal business made a substantially larger traditional hotel operation less attractive financially.

Mayor Ray Radis discussed how the existing tax incremental financing obligations would be handled under the proposed ownership change. He explained the district would remain in place, while the parties would work through the legal details of responsibility for repayment.

The PUD request is necessary because the proposal combines hotel operations with multifamily residential use on the same parcel, Schaefer said. The request was not intended to seek zoning concessions.

Questions also arose about whether the privately owned lodging units would be subject to the city's short-term rental regulations. The discussion distinguished the resort-operated units on Lot 1 from the proposed individual residential homes on Lot 4, which would be subject to the applicable rules if used as short-term rentals. The hotel rooms fall under daily rental regulations.

Source: Riponpress.com