A New Hotel on Grand Island   Term Paper ID:43354 Click to get this paper

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Paper Abstract: A new hotel on Grand Island NY is the perfect way to use our real eststae firm's stagnant cash and capitalize on Niagara Falls' recent tourist success. Paper Introduction: A New Hotel on Grand Island OPM Real Estate Development has more than two decades of highlyprofitable commercial and residential real estate endeavors We operate asa limited partnership and have tackled projects as small as three logcabins on a mountain to a Galleria Shopping Mall in South Bend IN Now thereal estate market is too quiet and our conservative cash position isgetting us nowhere It is time to strike off in a new direction thehospitality industry Vision We are looking to build Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. All other costs will be covered through abond issue. Retrieved on May 17, 2 9 fromhttp://www.grand-island.ny.us/ Thereis the option of building only one of the two towers, but it is unclear ifthis would generate sufficient revenue to justify the town's investment inus. Retrieved on May 17, 2 9 from http://www.hotel-online.com/News/PR2 3_2nd/May 3_HotelWaterParkStudy.htmlNiagara County Center for Economic Development. We will be situated on land near the river, away from the houses.There are other businesses not far away. It is time to strike off in a new direction: thehospitality industry.Vision We are looking to build a four-star hotel on Grand Island, NY. The setup costs for furnishings, linens, and other supplies for thehotel will be provided by Marriott and covered through the fees chargedduring the five-year contract. It is crossed byInterstate 19 and thus is quickly accessible from either Niagara Falls,and therefore Canada, or Buffalo. We operate asa limited partnership and have tackled projects as small as three logcabins on a mountain to a Galleria Shopping Mall in South Bend, IN. It willcater to people looking to stay in the United States and see thespectacular Niagara Falls but wish to avoid the crime and undesirableaspects of Niagara Falls, USA after dark. Erie County had an hotel occupancy rate of 58.7% for the first sixmonths of 2 8, but has a much higher rate during the summer, which inBuffalo does not really get going until June. "Strengthening Niagara."Retrieved on May 17, 2 9 fromhttp://www.niagarachamber.org/index.php?folder=24&page=186Town of Grand Island Official Web Site. Furthermore, in thename of economic development, they would sign a lease that did not requirerent for the first five years. This 1 room facility, managedby Marriott, would boast one of the finest restaurants in the area.Partnered with Niagara Falls tours, visitors could choose anything fromeconomical bus tours of the falls to chauffeured limousine service toNiagara on the Lake in Canada. A New Hotel on Grand Island OPM Real Estate Development has more than two decades of highlyprofitable commercial and residential real estate endeavors. We also can offeraccess to other areas of interest such as the Buffalo Theater district, theantique sales in Clarence, NY, Rich Stadium and even Six Flags at DarienLake. Allbuildings would be connected with tunnels, for the weather in Western NewYork is notorious.Community Grand Island, NY is a community of 18, residents. They have also offered to install signs to assist motorists infinding us. The working capital will be covered through a revolving line ofcredit from a bank, for the requirements may come in lower or higher thanthis because of the restaurant. While we expected to be given the same treatment, we werein fact welcomed because we would be giving the town an economic boostwithout overtaxing its facilities. Niagara Falls had one of the highest increases in hotel occupancy rates in the country. Simply building the hotel without the restaurant and hospitalityfacility is not viable because the income from these portions will becritical to maintaining the hotel's cash flow through the winter months.SourcesCoy Jeff and Haralson, Bill. This saved us millions in losses, but has left us awash with cashand no good investment options. Now thereal estate market is too quiet, and our conservative cash position isgetting us nowhere. Niagara Falls USA has long suffered from widespread industrializationin the early part of the 2 th century. The town has offered tobuild a special access road from East River Road to assure year-roundaccess. While the State of New York hasinformed us that it would not sell us the land, it was more than willing torent it to us and give us the rights to build there. The town has assured us that therewill be no problem changing the zoning as long as it does not block acurrent homeowner's view. The town is actually situated in themiddle of the Niagara River. The belief is that by the time the projectis complete the housing market will have picked up again. Our company has secured funding for a 7 % mortgage on the buildingfrom M&T bank once construction is finished. For the moment we will befinancing the land development internally. (Niagara County Center for Economic Development)In the interests of conservatism we will assume a 65% average rate ofoccupancy. This would give the hotel an average income of $3,9 per nightand the hospitality portion $5 , , for a total average monthly income of$245, .|Cash Flow | | | | | || | | | | | | ||Income from | |195, | |6 per night profit ||Hotel | | | | ||Income from |5 , | |65% average ||Hospitality | | |occupancy ||Total Monthly Income |245, | |3 days per month ||Total Annual Income |2,94 , | | | || | | | | | | ||Line of credit |74,4 | | | ||Interest | | | | ||Bond Interest | |1,778, | | | ||Total Costs | |1,852,4 | | | || | | | | | | ||Net profit | |1, 87,6 | | | ||Company's Investment |6, 5 , | | | ||Rate of Return| |17.98% | | | |Exit Strategies Most of the contracts entered into for this project are contingent onthe building of the hotel. We have arranged the mortgage in case any of our bondholderswish to have their interest bought out by our firm. Buffalo and Erie County's hotel occupancy rate shot up from 72.9 percent in June 2 7 to 75.2 percent this year while in Niagara Falls, it went from 65.8 percent to 73.8 percent. So while some of the mostfascinating aspects of the falls, such as the Wedding Falls, Three SistersIslands, and Goat Island are all on the American side, there is no hotelwith a good view. The road on which this land is situated is actually a seasonalparkway which is not maintained during the winter. We intend to pull visitors back to a quiet spotoverlooking the river with nothing but wild land in sight (Navy Island isuninhabitable because of its proximity to the falls). Here are the costs of construction. The parkway that connects the two state parks on the island issided on the river side by State land. On the verge of the housingcrisis our company wisely sold its developments and halted all furtherprojects. The intention would be to build on a piece of land overlooking NavyIsland, which sits at the mouth of the West Niagara River. Of particular interest is a packagewhere one could get married at the falls with guests and then transporteveryone back to the hotel via luxury coach for the reception, rather likeeloping and taking all of your friends with you. Since the site development isinternally financed, we do not foresee having to make any bond couponpayments before the hotel opens. There are many Canadian travelers who wish to stay in the UnitedStates at this time due to the favorable exchange rate. Also we will be receiving as much as $5 , per month from ourrestaurant and catering facilities. Any other issues will be cleared quickly and easily so long asthe project is viable.Funding The land in question actually belongs to the State of New York parksdepartment. A Guide to Cost Allocations for Developers" HotelOnline, May 2 3. Finally, dining at our fine restaurant will be a pleasure worthtraveling for by itself.Zoning The town government of the Island is most interested in our project.Currently there is a freeze on building permits due to excessiveresidential development that threatened to overwhelm the Island'sinfrastructure. The hotel wouldhave two towers of five stories, for a total 1 rooms, with a restaurant,entertaining rooms, and other recreational facilities in the center. The town is very stable and has anexceptionally low crime rate due to the fact that the population is spreadall over the island rather than concentrated on a crossroads. "What's It Going to Cost to Build a Hotel withan Indoor Waterpark? Until this happens we can pull out at any time.Once ground is broken on this project there is little turning back. Medium term and more upscale vacationers will appreciate ouramenities. The hospitality and catering facilitiesare standard for this type of hotel and are thus included in the per roomcost estimate.|Cost of Building the | | | | ||Hotel | | | | || | | | | | | ||Category | |Per Room |Total | |Method of Funding || | | | | | | ||Land | | | | | |No-cost NY State || | | | | | |lease ||Site |6 ,5 | |6, 5 , | |Internal Financing||Development | | | | | ||Construction |2 2, | |2 ,2 , | |2 year coupon || | | | | |bonds sold ||FF&E | |52, | |5,2 , | | private || | | | | | |investors at 7% ||Pre-Opening | | | | | ||and | | | | | || Working |12,4 | |1,24 , | |Bank Line of ||Capital | | | | |Credit, 6% || | | | | | | ||Total | |326,9 | |32,69 , | | || | | | | | | || | | | | | | ||Percent | | | .8149281| | ||Financed | | | | | || | | | | | | |Cash Inflows Marriott has assured us that an income of $6 per room (net of theirfees and maintenance costs) is to be expected from a facility of ourcaliber. So the initial land cost is nothing. 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