Incentives Highlighted Following Hotel Financing

Following the announcement that the University of Mary Washington Foundation for a planned hotel in Eagle Village, city and university officials say that city and state business incentives were crucial to advancing the project. The Fredericksburg City Council recently approved an incentive package worth up to $310,000 for the development of the hotel. Coupled with new state business incentives,

But would the project have received financing without the incentives? Jeff Rountree, CEO of the UMW Foundation, didn't go that far in his answer, but he did say that the incentives helped solidify the foundation upon which the hotel will operate. 

"I would not have been comfortable making this recommendation to my board without the incentives," says Rountree. "It's not just getting the financing, it's wether or not you can create a whole financial package for the project. Sure, it's only $60,000 per year, but in the hotel business that's significant."

Richard Tremblay, economic development manager for the city of Fredericksburg, says that the hotel will serve a broader base than just the university and hospital populations. 

"It's wonderful for the city's tourism industry as well," says Tremblay. "It's obviously going to serve more than the hospital's needs and the university's needs. It's going to serve a broader market and the city is excited to have a quality hotel that can serve business needs and tourist needs."

Tremblay also said that the financing agreement demonstrates that the project is on the right track. 

"To get financing in this market, it's not easy," says Tremblay. "It's a testament to how strong the project is."

Rountree refused to disclose the terms of the loan, citing the request of the bank. He did say that the foundation has a "substantial amount of equity" invested in the project. 

The planned four story, 96-room hotel would sit on a two acre site between the existing Phase I of Eagle Village and the Giant Supermarket. The hotel would be owned by the UMW Foundation but day-to-day operations of the hotel would be contracted out to a third-party management company.

Rountree says the foundation is close to choosing a hotel flag to operate under. 

The estimated $13-$14 million project would create approximately 55 full time jobs and 15 part time jobs. The UMW Foundations hopes to open the hotel around mid-2013.