Over the past few years, the Chestertown Spy has been less than discreet in advocating for a medium-sized, high-quality hotel for Chestertown. At the same time, it has also encouraged Washington College to assume a leadership role in its development. Part of this is tied to the Spy’s desire for a bright, prosperous future for the town it loves, but also because it’s the right time and circumstances for WC to do so.
For decades, some very hard realities (capital, financing, market analysis, revenue projections) have given pause for such a role to dozens of WC leaders going as far back as the Douglass Cater administration in the 1980s. For reasons that were rational and irrational, the numbers never seemed to work enough to move forward with such a plan. Nonetheless, that interest and passion for such a facility remains as strong now as it did thirty five years ago.
Why? Because the rewards of building a Chestertown hotel are so strikingly transparent. The ability to accommodate medium-sized conferences, weddings, family reunions, returning alumni, prospective students and their parents, visiting dignitaries, as well as business people calling on local manufacturers, marketing firms, and other service industries, not only makes such a thing economically viable, these guests bring with them sizable discretionary dollars for shopping, dining, and other services.
In the world of higher education, even with relatively smaller schools, this has been the rationale in investing in the hospitality market. Over the last decade, countless schools have taken the plunge with hotel facilities ranging from twenty to eighty rooms. Denison, Swarthmore, Kenyon, Gettysburg, Oberlin, Sewanee and W&L are just the latest examples of this trend.
While many of these schools may have better market capacity, larger endowments, and wealthier donor/investor constituencies to work with, the truth is that many other schools do not. That would include Flagler College, College of the Ozarks, Savannah College of Art and Design, or Wells College in upper state New York.
It may be true on the face of it that Chestertown and Washington College have significant handicaps to overcome in finding a solid business plan, the Spy’s albeit modest research into the business of town-gown hotels strongly suggests that these are minor roadblocks that can be effectively removed through creative financial and strategic partnerships.
Oberlin College is a good example.
In Oberlin’s case, a liberal arts college located in rural Ohio about an hour’s drive from Cleveland, the school ultimately built a hotel with seventy guest rooms that features a restaurant focused on local food and modest conference center. Planned to be “the cornerstone of Oberlin’s Green Arts District,”the facility’s 105,000 square feet also houses the college’s admissions and development staff. That sounds like a textbook definition of mixed use.The total cost was close to $36 million.
The expenses of a Chestertown equivalent would be significantly lower than that figure. Chestertown’s sweet spot for rooms would be more in the order of forty rooms. With that factored in, as well as a more similar comparison with the recently built Inn at Swarthmore, which cost closer to $25 million.
While $25 million sounds better than $35 million, it still turns out to be a huge sum for a small college in a small town. So where does Washington College get that kind of capital?
In the case of Oberlin, almost 60% of the construction costs were financed. Secondly, the school created a naming opportunity for a leadership donation (in this case $5 million from an Oberlin alum) and finally a consortium of donors/investors/community supporters to close the gap.
Another smart thing that Oberlin did was to place non-academic divisions of the school in the new building rather than build separate facilities. In this case, as noted above, Oberlin decided to relocate the College’s external relations staff there in order to maximize contact with prospective students, alumni, and donors under the same roof.
With waterfront access, a similar model could be used in Chestertown for WC alumni and admissions centers. Or, equally appealing, would be to create a center that would include the hotel and one of its three centers of excellence like its renowned Center for Society and the Environment. Those strategies would undoubtedly add to the cost of the project but would reduce costs in other parts of the College’s capital budget.
Using a working number of $25 million, it would be mean that $15 million would be financed, a major donor, given a strong case for support, should be able to be found at the $3-5 million naming opportunity level, and the balance would come from other donors, investors, possible alumni timeshare programs, as well as the room guarantee contracts with the region’s larger institutions, included the College, the local hospital, manufacturers like Dixon Valve, and other, smaller service providers, schools, and retailers, proportionate to their annual need and circumstances.
Another factor that would make this goal achievable would be a strong “All In” response from the Town of Chestertown and Kent County. A project of this magnitude needs the careful escort of these governments through permitting and regulatory issues. And the project needs grassroots support from town citizens as well.
In the final analysis, as local developer John Wilson so clearly articulated in his interview with the Spy this fall, every project like this needs a champion. While Washington College must take the lead, a Chestertown hotel will need hundreds of champions to make this happen.
Let us hope the will is there.