Port to consider new hotel development at Bellingham airport

The Port of Bellingham commission will consider the development of a new hotel near the Bellingham International Aiport at its next public meeting on Tuesday, April 2.

Hotel Services Group LLC, a Mount Vernon-based company, has signed a letter of intent to build a Holiday Inn on about 3.77 acres of port-owned property on Mitchell Way, just south of the Pacific Cataract Laser Institute and across the street from the airport’s commercial terminal.

The hotel would have between 150-160 guest rooms, a full restaurant, an indoor pool, underground and surface parking and about 7,000 square feet of conference rooms and meeting space, according to the hotel management firm’s proposal. The company estimates the hotel would employ about 40 full-time-equivalent employees, while another 40-50 people would staff the restaurant.

The construction cost would be about $18.5 million, according to a port announcement.

If the commission approves the letter of intent, the port and the developers would enter a 30-day due diligence period that would look deeper into the development site plans and ensure Hotel Services Group has adequate financial ability to cover construction and operation costs. Hotel Services Group would pay the Port $10,000 for the preliminary agreement.

Should a final agreement move forward, port commissioners would vote on whether to approve a lease during a public meeting on June 4.

The proposed lease would be good for 50 years. It would also include a 25-year renewal option. The port stands to gain more than $10 million in rent over the lease’s initial 50-year period, according to a March 22 memorandum.

The letter of intent states that Hotel Services Group would be responsible for completing all site improvements, including surface and sub-surface parking, at its own expense. Construction at the site would start by May 2014 and improvements would need to be completed within 18 months, according to the agreement.

The agreement also states that the hotel’s final design must be approved by the port prior to any construction.

The port has been in search of a hotel developer for the Mitchell Way site since last fall. After sending out a “request for qualifications and vision,” the agency said it received four written proposals from national-brand affiliated hotels.

A selection team reviewed the four proposals and interviewed the respondents before selecting Hotel Services Group, which currently operates eight national-brand hotels in western Washington, including InterContinental Hotels Group, Hilton and Best Western.

As the hotel development plan moves forward, a $38 million renovation and expansion on the commercial terminal at the Bellingham International Airport continues. An expanded baggage claim area and a new baggage carrousel are expected to open this spring.

Hotel Services Group is online at www.hotelservicesgroup.com.

View the letter of intent and the port memorandum detailing the proposal here: http://portofbellingham.com/DocumentCenter/View/2284.

The Port of Bellingham commission meeting will be held at 3 p.m. on Tuesday, April 2, in the port’s Harbor Center Conference Room, located at 1801 Roeder Ave., in Bellingham

Evan Marczynski, lead reporter for The Bellingham Business Journal, can be reached at 360-647-8805, Ext. 5052, or evan@bbjtoday.com

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