Lodging industry timeline in O’Fallon
The hotels just keep coming in O’Fallon, and officials continue to consider the lodging industry a major part of its economic development future.
The city of about 30,000 people estimates it will collect more than $2.3 million in hotel/motel taxes in 2020, thanks to its 11 existing hotels and two new hotels expected to open this year along Interstate 64.
Now a local developer is asking the city to approve zoning for construction of yet another hotel, a Fairfield Inn & Suites, next to Gold’s Gym on Central Park Drive. Fairfield is owned by Marriott.
“We saw an opening for another hotel under the Marriott umbrella in the local market,” said John Van Cleave, vice president of operations for HMA Management, a St. Louis-based company that would hold a minority stake and manage the new Fairfield Inn. “Marriott is a great hotel brand, and it has a really strong rewards-program following.”
The developer, Darrell Shelton, of Commercial Property Investors, formerly of D&D Lodging, was unavailable for comment. He also is building a Hampton Inn in O’Fallon.
The opportunity for a new Fairfield Inn was created last year, when the one in Fairview Heights became a Wingate by Wyndham, Van Cleave said. A Marriott TownPlace Suites is being built in O’Fallon, but it has a larger extended-stay capacity.
The new Fairfield Inn would have 108 rooms, a fitness center, indoor pool and meeting space. Plans will go before the O’Fallon Planning Commission on Tuesday night.
“(The commission) will gather facts and make a recommendation to the City Council,” said City Administrator Walter Denton, noting the final zoning vote is likely to take place in February.
Shelton and Van Cleave hope to see the Fairfield Inn open in the summer of 2020. HMA Management also manages the Hampton Inn in Glen Carbon and Regency Conference Center in O’Fallon, and it will manage the Hampton Inn in O’Fallon when it opens.
Hotels prove lucrative for city
O’Fallon now has 998 hotel rooms in 11 hotels, most along Interstate 64. That includes the Baymont by Wyndham, Candlewood Suites, Best Western, Drury Inn & Suites, Extended Stay America, Hilton Garden Inn, HomeTowne Studios & Suites, LaQuinta Inn & Suites, Quality Inn, Super 8 by Wydham and Sleep Inn.
Marriott TownPlace Suites and the Hampton Inn will add 84 and 101 rooms, respectively. If the Fairfield Inn project goes forward, the number of rooms in O’Fallon will reach 1,291.
“(Hotels have) always had a role in our economy because some of them have been around for 20 years,” Denton said. “But we are now using them as a very integral part of our economic development.”
In 2016, the city raised its hotel/motel tax from 5 to 9 percent. Revenues went from $881,798 in 2016 to $1,116,148 in 2017 and $1,978,200 in 2018. Estimates are $2,008,500 for 2019 and $2,354,000 for 2020.
The tax increase was part of “Destination O’Fallon.”
“It’s an economic-development initiative to bring visitors to O’Fallon and to improve our local economy,” Denton said.
He noted that only lodging customers pay the tax. That fact made the increase more acceptable among local residents. A standing-room-only crowd of mostly soccer supporters applauded and cheered loudly at a City Council meeting after the proposal’s first reading on Nov. 7, 2016.
Tax funds soccer fields, pavilion
Extra revenue from the increased hotel/motel tax is already being used for two community projects: Eight new soccer fields that opened in the summer of 2017 at Family Sports Park and a new O’Fallon Station pavilion completed in December downtown.
Officials predict the soccer fields will host 2,000 games a year, including regional tournaments. The pavilion will be the site of farmers markets, festivals and other events.
The city spent $9.3 million on the soccer fields and $1.5 million on the pavilion, using reserve funds and issuing $9.5 million in bonds that will be repaid by hotel/motel tax revenues, Denton said.
The soccer fields and pavilion are expected to attract out-of-town visitors who will seek local lodging, further boosting tax revenues to fund community projects.
O’Fallon Community Development Director Ted Shekell also noted that the hotels serve patients seeking medical care at the new St. Elizabeth’s Hospital in O’Fallon and Memorial Hospital in Shiloh and their families; and people attending special events in St. Louis who prefer to stay in the suburbs.
“It’s great for the community,” he said. “It gives people options for lodging, and if they’re staying in a local hotel, they’re probably eating at local restaurants and shopping at local stores. Hotels are a big economic engine for us.”