Economic conditions stall golf course hotel project

By Jean Reid Norman

Tuesday, Aug. 11, 2009 | 9:37 a.m.

The economy has halted another Clark County hotel project — this one in Boulder City.

Hawthorn Suites Golf Resorts has iced plans to build a resort hotel on the city-owned Boulder Creek Golf Course.

Financing dried up after the Las Vegas hotel market took a dive last year, Hawthorn Suites Golf Resorts President Morgan Burkett said.

“It’s nobody’s fault,” Burkett said. “It’s just one of those market conditions or systemic conditions that we all have to ride through.”

Original plans called for 140 suites and a 9,000-square-foot events center. The city has a 50-year lease with the company for $173,000 a year.

An eight-month delay in the project caused by a legal challenge closed the window of opportunity for financing, Burkett said. Had that delay not occurred, the hotel would probably be opening this fall and could have been awash in red ink, he said.

“I guess in a way it was a fortuitous break,” he said. “Things work out the way they’re supposed to, I guess.”

The company returned to the City Council last fall to ask that the site be moved from adjacent to the clubhouse to across Veterans Memorial Drive.

At that time, Burkett said none of his company’s project had been delayed by the slowing economy but he remained cautious.

The company since then has missed several milestones laid out in the contract, and the city could declare it in default if it wants to, Burkett said.

City Attorney Dave Olsen has drafted a letter to send to the company to see how it wishes to proceed, he said.

The project was being treated as a joint development agreement, meaning both sides had something to give and something to gain, Olsen said. The city had the 27-hole Boulder Creek Golf Club as an amenity for the hotel and hoped to gain business from the hotel for the struggling course.

The company would still be interested in proceeding with the project when the economy turns around, in 12 to 18 months, Burkett said.

“The economic environment is so grave at this point that nobody could get this project done,” he said. “When the Rio has $59 rooms and the Bellagio has $99 rooms, you know things are bad.”

The proposed hotel became controversial during the municipal election of 2007, when then-candidates Linda Strickland and Travis Chandler questioned the agreement to build on the Boulder Creek Golf Course property. Both said the city needed to give more thought as to whether the golf course should remain open.

The City Council approved the original lease deal with Hawthorn Suites in June 2007, during the meeting before Strickland and Chandler took their seats on the council. They questioned the legality of the lease, and the project was held up for eight months while the city requested an attorney general’s opinion, which affirmed the contract.

Chandler said the failure of the hotel to build was understandable.

“It has always been my position that it would be a good project provided it had community support,” said Chandler, who has sought to get a ballot question on the Boulder Creek Golf Course. The presence of the Hawthorn Suites would make it difficult, however, to decide to close the course, if that is what voters wanted to do, he said.

Mayor Roger Tobler called the loss of Hawthorn Suites “a blow,” but said now the council should step back and reconsider options for the golf course.

“I think this council is going to need to look, but unfortunately, because of the economy, we don’t have many options,” he said, noting that efforts to sell either the course or the land could fail in this market.

“In the long term, I would like to see the city move away from the golf course, because it is so large it can impact our budget,” Tobler said. “At the same time, we have to do it the right way, where it brings the most benefit to the city.”

Jean Reid Norman can be reached at 948-2073 or [email protected].