BY ED FELIEN
I know you’ve got a lot on your plate, but there are some concrete things you can do to help end homelessness and take some of the pressure off the encampment at the Powderhorn Sanctuary.
Hennepin County is buying hotels for the homeless. You can do that, too. Last winter you got generous contributions from Ecolab, Securian, Andersen Corp. and Wells Fargo, and now is the time for all good Minnesota companies to once again come to the aid of our homeless, and your office could coordinate that.
There is a wonderful hotel for sale in Chisago City, just 40 miles from the Twin Cities. It’s got 51 rooms, a conference room, a small café and a large swimming pool.
Here’s the description by the broker:
“Marcus & Millichap is proud to be the Exclusive Representative for the sale of the Comfort Inn and Suites Chisago City.
Positioned less than 40 miles from the MSP metro the hotel greatly benefits with its visibility off of Highway 8. This Comfort Inn and Suites is the ONLY Choice product in a 25-mile radius from its location and one of three in a 50-mile radius. It also is only one of two hotels in Chisago City. The property gains demand from the numerous surrounding lakes bringing tourists from all around the Midwest. Additionally, the hotel is only 1.4 miles from the Winehaven Winery bringing guests and wedding parties often. This limited-service 3 story, 51 room property was built in 2012 originally as a GrandStay. Guests can enjoy the extended-stay suite style rooms. There are 14 extended-stay suites in the hotel. The property is priced at a 2.8 Room Revenue Multiplier and offers investors an opportunity to acquire a fully stabilized, limited-service asset, in the extended metro area. The Comfort Inn and Suites Chisago City is located just off Highway 8 that sees over 20,000 cars a day. It is the complete market leader and benefits from the local demand there with a healthy mix of leisure and business travelers. Main employers in Chisago County are Plastics Products with almost 1,000 employees, Premier Marine, LEI Packaging, and Rosenbauer Minnesota LLC. The city also draws visitors in for the dense amount of lakes, national parks, and the Winehaven Winery Vineyard. The property features 51 guestrooms with a heated indoor pool, whirlpool, 14 extended-stay suites, and business center for guests. Each guestroom is equipped with a microwave, refrigerator, flat screen TV with premium channels, and coffee maker. The property also offers high-speed WiFi, complimentary hot breakfast, and 1 meeting room.”
They’re asking $3.3 million, but it was on the market before COVID wiped out the hospitality industry, so they would probably take much less. You might need 20% for a down payment. If the price went down to $3 million (and it should go down much further than that), the down payment would be $600,000. You should be able to find that much cash just lying around, and you could finance the rest by selling bonds. It would be a great investment for the state, and it would be a great contribution to fighting homelessness. The cost would work out to about $60,000 per unit, which is an excellent value.
The 14 extended-stay suites would be suitable for families with children. There should be a shuttle twice a day to the Twin Cities. There should be on-site job counseling, mental health screening and methadone treatment and chemical dependency counseling.
This would be transitional housing. People would check in for one month of free housing. After that, they would pay 30% of their monthly income for rent, and they could stay in the hotel until they find permanent housing.
Buying the Comfort Inn will not end homelessness in Minnesota. It may bring with it a lot of problems. And, in the end, it might not work out. But, even then, we would learn something from the experiment. This may not be the best option available. But the worst option would be doing nothing.