The Cottonwood City Council unanimously voted in favor of selling a 3.74-acre parcel of land at 535 S. Sixth St., at the corner of Sixth Street and State Route 89A, to Sunridge Properties Inc., a management company that has 17 hotels spread across Arizona, California, Colorado, New Mexico and Utah, for a price of $383,328.
The sale is equal to $4 per square foot, based on a January 2018 appraisal.
Sunridge requested to purchase the property with a plan to build a Springhill Suites by Marriott hotel at the location, with a plan for 85 beds. Sunridge expects to spend $11 million to construct the new hotel.
“Our thinking is Cottonwood is a nice community,” Springhill CEO Paul Welker told the council at a recent meeting. “We feel like it would attract a lot of people who would not want to pay $3-, $4-, $500 sometimes when rates get crazy in Sedona. If they see something at a third of that, I think a lot of those people will elect to go 15 miles to Cottonwood and stay here, and I think that will benefit your community.
“I think it will benefit your stores, your restaurants, your gas stations, and that I think will be an added benefit to the community.”
Springhill representatives told the council it estimated its annual gross revenues from the hotel at $3 million once it got up and running, which would mean $210,000 yearly in additional sales tax and bed taxes, in addition to an estimated $185,000 in water and wastewater utility fees.
Welker made the case that with Marriott claiming to have over a 100 million rewards members worldwide, having a Marriott hotel in town will attract visitors to Cottonwood, rather than other nearby towns.
“A lot of these people that are loyal Marriott members, a lot of times are looking at places to stay, and they’re looking for a Marriott,” Welker said. “If there’s not something here in Cottonwood, they’ll go to Prescott or they’ll go to Sedona or Flagstaff.”
“We are open for business and we are very customer friendly,” Cottonwood Vice Mayor Michael Mathews said, expressing his support for the project.
Mathews also expressed his own opinion as a real estate professional, arguing that the price offered by Sunridge was a fair price for land in the city.
“I love it. As far as value goes, I did a lot of research looking at that, and I think even if we did a new appraisal today I’m not so sure we would get anything over the $4 a square foot there was two years ago,” Mathews said.
The land that Sunridge plans to buy does not make up the entirety of the parcel owned by the city. Town Manager Ron Corbin suggested at the meeting that the remaining portion owned by Cottonwood is large enough for the city to later sell to another buyer in order to construct a restaurant with the requisite parking.
Local hospitality business owners praised the project as a potential way to bring new business into town, but complained about a request by Springfield to waive its permit and plan review fees, estimated by city staff to be at $90,000, in order to entice the company to come to Cottonwood.
“We’re 100% for this project,” Eric Jurisin, owner of the Tavern Hotel, said to the council. He pointed to his hotel being full many nights and saw the project as a way to bring more customers to his restaurant. “We believe we need more rooms in Cottonwood. We believe we need more high-end rooms in Cottonwood, and this is a pretty good fit.”
“The part I struggle with is the waiving of the fees,” Jurisin said. “I understand cities waive fees to bring businesses to town. If we were trying to get a Tesla plant, maybe. This is a good market for the hotel. They would do well …. I don’t think it’s a good precedent at this time in our current financial situation.”
After hearing multiple business owners make that case, arguing that it would be unfair for this new business to have its fees waived when other long-standing local businesses had to pay fees, Welker told the council he would be willing to withdraw that request.
“After hearing the public discussion, we would be willing to withdraw the request for waiving the permit fees,” Welker said. “I understand where they’re coming from, and I know I put you guys in an awkward position, but you’ve got to ask, right?”
After Welker withdrew the request, the council expressed unambiguous support for the project before voting unanimously in favor of the sale.
“That was my biggest sticking point,” Councilwoman Tosca Henry said. “I’m not a fan of giving concessions if they’re not uniform, and especially if we’re going to spite our good local business owners.”
