According to the headline of a recent article in LNP, “Marriott hotel addition now to cost $39.4M, with $9M from CRIZ”.
The article states “Since last summer, developer Penn Square Partners’ budget for the 110-room annex has increased by just under a third, from $29.9 million to $39.4 million, city and company officials said.”
That amounts to $358,000 per room.
HVS, one of the hotel industry’s leading experts on hotels, reports in “US Hotel Development Cost Survey – 2015/16” that mid-scale hotels without Food and Beverage, the case with the Marriott addition, cost an average of $151,900 in total.
Why should a $151,900 cost of a new hotel room become $358,000 in Lancaster, an area of moderate construction costs?
Penn Square Partners, a subsidiary of both the Steinman family and Dale High is the developer, franchisee, manager and equitable owner of the Marriott (with an option to buy from the City at a nominal cost.).
With the addition funded by a $9 CRIZ gift (at the cost of future tax payers) and further financed through bonds through the City of Lancaster, into whose pockets would proceeds flow if costs are bloated?