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Cohen Development Company - site briefALBERTVILLE, MINNESOTA DESCRIPTION Roughly equidistant between Minneapolis/ St. Paul and St. Cloud, Minnesota. NEAREST METRO Minneapolis/St. Paul St. Cloud NEAREST CENTER Ridgedale Mall, Minnetonka Brookdale Mall, Brooklyn Center Mall of America, Minneapolis VISIBILITY Immediately adjacent to Interstate 1-94. TRAFFIC 1-94 East 1-94 West County Road 19 North County Road 19 South Source: Minnesota Department of Transportation, 1992. DEMOGRAPHICS 5 miles 10 miles 15 miles 25 miles 50 miles 75 miles Source: Information Decision Systems, 1993 SITE BRIEF The site is well -positioned for major regional retailers, factory outlet stores, and light industrial users to take advantage of the growth of these metropolitan regions as they grow toward each other. 27 miles 22 miles 29 miles 29 miles 39 miles Unrestricted visibility for approximately 1-2 miles in either direction. 40,300 33,800 7,370 10,540 14,270 75,267 214,194 975,784 3,039,262 3,466,360 COHEN DEVELOPMENT COMPANY SHOPPING CENTER DEVELOPMENT AND MANAGEMENT SINCE 1970 CONTACT. • Les Cohen Tel. (309) 673-0790 Fax. (309) 673-4308 30 y 'I'11E NEW YORK 77MES REAL ESTATE SUNDAY, AP121L 30, 1995 After the Malls Come. the Small Hotels �_,- Limited -Service Concept Is Aimed at Shopper -Tourists By JEANETTE ALMADA GURNEE Ill. In this village in northern Illinois halfway between Chicago and Milwaukee there is an outlet mall, and around that mall are hotels. It is an example of what consultants de- scribe as the strongest growth market in the hotel business: modest -cost hotels in rural areas near major shopping centers. The Gurnee Mills Outlet Mall, built along- side an interstate highway network that connects Illinois to Wisconsin and other abutting states, has been a draw for week- end shoppers since it opened in 1991. "Over 2,000 busloads of shoppers come here each year, and they come from hundreds of miles away," said Gurnee's village administrator, James T. Hayner. The mall developers were attracted to the village because of its location and because Gurnee is the site of a Six Flags theme park, and the hotel developers saw an opportunity in those flocks of shopper and tourists. Four hotels have been built around the mall since it opened. A fifth, an older building, has doubled its size. Two of those hotels, a 63-room Fairfield Inn and a 64-room Comfort Inn, sit side by side on the mall's periphery. The two had a 70 percent occupancy rate last year, which consultants consider a good rate for a rural area. They were built by Tharaldson Enter- prises, a North Dakota hotel developer that has been a pioneer in the market for econ- omy -class hotels in the Midwest. It has built 150 small hotels for rural markets. "Demand generated by large outlet malls near major highway interchanges in these rural areas attracts strong markets for limited -service hotels," said Donald J. Mas- sagli in the Chicago offices of BOO Seidman, an international consulting firm. "This is the only segment of the hotel industry to show new construction growth." Limited -service hotels provide no confer- ence or dining services. They are character- ized as offering guest rooms and little else. The most economy -oriented of these build- ings have blurred the line between hotels and roadside, car -to -door. motels that evolved within the industry in the 1950's and 1960's. They represent an evolutionary stage between the motel and the full -service traditional hotel. Hotel professionals disagree among themselves in classifying motels apart from limited -service hotels. "The line is so hazy between these buildings that it is impossible FiWaarapbs by Stew Kaaae tar Tba New rats T IM$ In an effort to capture a strong growth market, the Fairfield Inn, below, in Gurnee, Ill., and three other hotels have been built around the Gurnee Mills Outlet Mall, above. to simply say all buildings with pools or even parking lots are hotels rather than motels," Mr. Massagli said. But in general the limited -service hotels want themselves thought of as just that, and. not motels. They are general one- to four- story buildings surrounded by parking lots. There may be exterior corridors to the rooms, but frequently there Is at least one interior corridor. Rates for limited -service hotel rooms range from $30 to $60 a night while budget motel rates are around $20 a night and can range as high as $30. Despite the no -frill tag associated with limited service, these hotels are evolving in response to market demand and many of them offer indoor pools, breakfast areas and more, commanding $55 and more often $65 to $75 a night. Tuscola, a southern Illinois town, is get- dng a lasta of this trend with a new factory outlet shopping mail and a 59-room Holiday Inn Express opened last August by Ameri- host Properties Inc. The hotel stretches the scope of limited -service price and ameni- ties. Two of the guest rooms, for example, are whirlpool -equipped suites that com- mand $90 a night. Amerihost said it expect- ed that the mall would spur a tourist market In the old railroad town. According to R.A. Price, director of the Area Improvement Association In Tuscola, the Holiday Inn Express has brought about a 20 to 30 percent. Increase in overnight tourism. "Before that hotel was built," Mr. Price said, "people just traveled through town, en route to several Amish communi- ties that surround Tuscola. Now they make ovenight trips to these communities and plan a day of shopping as well." Amerihost, based in the Chicago suburb of Des Plaines, Ill., began as a hotel manage- ment company eight years ago. The compa- ny's president, Michael T. Holtz, said that shopping malls had set the stage for the construction of about half of the 17 hotels it has built. Fifteen of those were built in the last year, and an additional 20 limited -serv- ice hotels will be built this year. Many of Amerihost's hotels have been built under various franchise brand names including Holiday Inn Express and Days Inn. Amerihost typically holds between 12 percent and 100 percent ownership. This year, however, the hotel developer will ex- pand construction of its own brand name, Amerihost Inns. Like the Holiday Inn Express in Tuscola, Amerihost Inns will add frills and charge $55 to $60 a night, nearing the upper end of the limited -service price range. Amerihost Inns will also include several suites with whirlpools and will provide small meeting rooms with some business services like faxes. While officials in rural towns like Tuscola and Gurnee favor mall development within their communities, they especially cham- pion hotel development near the malls. The Gurnee Mills Outlet Mall has yielded $3.6 million in annual sales tax revenues for the village of Gurnee. An additional $1 mil- lion in tax revenues come from peripheral retail businesses linked to the mall's pres- ence. Mr. Rayner stresses that hotels host the market that fuels his community's tour- ist economy. Tharaldson began buying budget hotels in the early 1980's. Don Evenson, vice presi- dent of real estate at Tharaldson Enter- prises, said his company was building hotels with 60 to 70 rooms. Having built 30 hotels last year, and expecting to build 50 more this year, Tharaldson Enterprises will own at least 200 limited -service hotels by the end of the year, Mr. Evenson said. When the Gurnee Mills Outlet Mail was planned, the Mills Corporation of Washing- ton, the developer, set aside two parcels in its original 400-acre lot for hotel expansion for Theraldson. "It took time for mall developers to see limited -service hotels as viable entities alongside their rural malls," Mr. Evenson said. "Ninety percent of our projects are VALUE OF CONSTRUCTION CONTRACTS (Residential in millions of dollars) Mar, 95 Mar. 94 Change Nation 10,515 13.067 •20% Northeast 1,017 1.175 -13% Midwest 2,322 2,959 '22 % South 4,664 5.380 .13% West 2.512 3,553 -29% Source: F.W. Dodge Division, McGraw-Hill Information Systems. MORTGAGE INTEREST RATES (Averages) Northeast Wk. Ending Previous Year Apr .21 Week Ago Conventional (30-yr) 8.34 .8.40 8.44 Adjustable (lstyr) 6,08 6.07 5.05 Midwest Conventional (30-yr) 8.56 8.58 8.66 Adjustable (1st yr) 6.67 .6.71 5.44 South Conventional (30-yo 8.37 8.43 8.56 Adjustable (Istyr) 6.41 6.37 5.18 West Conventional (30 yr) 8.42 8.49 8.58 Adjustable (tstyr) 6.59 6.57 5.23 Northaast Conn, Maine, Mass.. N H.. N J.. N.Y . Pa_ R.L, Vt. Midwest: ill_ Intl., Iowa. Kan., Mich.. Minn., Mo., Neb.. N.D_ Oha, S D_ W-s. South: Ala . Ark., Del., D.C., Fla., Ga., Ky.. La, Md., Miss., N C . Okla., S.C., Tenn., Tex., Va.. W. Va. Weet: Alaska. Ar¢., Cahl.. Cob.. Hawaii, baho. Mont., Nev , N M , Ore 'la, Wash Wyo. Indexes for Adjustable -Rate Mortgages, Week Ending Apr. 21. 1995• 6-mo. Treasury bill 5.69 5.84 4,21 1-yr. Treas. security 6.17 6.28 4.90 3-yr. Treas. security 6.58 6.72 6,09 5-yr. Treas. security 6.78 6,89 6.60 National Mortgage Contract Rate 8.00 8.00 6.68 'Rates on most adjustable mortgages are set 1 103 percentage points above these indexes. Source: HSH Assooates Naw Y.rk Tlmrt built along an interstate and 70 percent of those are built near major malls or at least retail centers." Hotel accommodations have become a vital interest to the Mills Corporation as it built several outlet malls throughout the country. "Shopping being a No. 1 tourist attraction, we place emphasis on the enter- tainment value of shopping when we plan our malls," said Steven Jacobsen, vice pres- ident of real estate at the mall developer. The company's Sawgrass Mills outle mall in Sunrise, Fla., attracts vacationin t shoppers. The company also has a Potomr g Mills mall near Washington and a Frank' 'c Mills mall in Philadelphia. in Two malls under construction in Cl tiler, Ariz., and Ontario, Calif., are also b tan - planned around tourist traffic. "We d, eing our malls to intercept tourist traffic,' ; sign Jacobsen said. "En route to Palm Sp tourists will'stop by our Ontario mall'rings, iAP Photo/Mark Cowan) Shoppers move from store to store at the new Outlet Store Shopping Center in Tuscola. The location, at the intersection of 1-57 and Highway 36 in East Central Illinois, seems an unlikely choice for such a large mall, yet early indications are that it is a hit. Shoppers now outnumber small town's residents By TERRI LIKENS Associated Press Writer TUSCOLA, I11. (AP) — A portable highway sign flashed the warning, "Watch For Changes," under a newly acti- vated traffic signal. In Tuscola — where corn was king, but now a huge new outlet mall rises above the prairie — the message was overkill. The town of 4,200 is bracing for the 5,000 cars a day expect- ed for the holiday shopping sea- son. That's a lot of cars for a place where past traffic prob- lems usually involved the occa- sional tractor moseying through downtown. But residents are pleased with the 60-,.soon-to-be-100, shop retail center that has changed the face and nature of their community. The farming industry still plays a significant economic role in the central Illinois town. Douglas County usually ranks tops in corn production statewide. However, the opening of Factory -Stores at Tuscola on some of those corn fields this fall has secured the close-knit community as a regional retail center. "We've almost got the best of both worlds," said Butch Price, executive director of -the Tuscola Area Improvement Association. "Neighbors still watch out for each other. The outlet mall really isn't going to affect that." How Tuscola landed the out- let is a lesson for small commu- nities. Several years ago, real estate agent Connie Wills returned from a trip through Kentucky where she noticed an outlet mall in the similarly remote Western Kentucky town of Eddyville. She passed on her observa- tions and town leaders decided to market their town for a simi- lar shopping center. Greg Wilson, spokesman for the Virginia company Charter Oaks, which owns the Tuscola mall, said their instincts were good. "Basically, they're at a crossroads where they are pulling at people," he said. Tuscola is about 35 miles from Champaign, home of the University of Illinois, and about the same from the Charleston - Mattoon area where the Eastern Illinois University lies. Not only does it draw from 100,000 full-time students, but it pulls in interstate traffic bound for Chicago, St. Louis and Indianapolis, Wilson said. Reports show millions of tourists pass within 50 miles of Tuscola, Wilson said. Already Tuscola is reaping benefits from the outlet mall and the 450 new jobs it is adding to an already strong economy. "Right now we're under 5 percent unemployment, and that doesn't count the new jobs," Price said. Subdivisions and condomini- um and apartment complexes are springing up and will increase the property tax base. The town also keeps a fraction of the sales tax from the mall. The police force has added an officer and the fire depart- ment is buying new equipment. Problems are mainly traffic related, thus the addition of the traffic signal. "We had three, now we have four," Price said. #*yet Iw 4P I gas IV, Immom "'VIII 44 Z LLJ -7 0 U g X Mill