Last updated on March 17th, 2020 at 01:34 pm
The city of Oak Creek and a Wisconsin Dells-based hotel developer and operator will partner to develop two hotels totaling up to 221 rooms and an 11,500-square-foot conference and event center on land just south of the Ikea furniture store in Oak Creek, comprising an investment of over $30 million.
On Tuesday evening, the Oak Creek Common Council approved a development agreement related to the project with Oak Creek Hotel Ventures LLC, an affiliate of Stand Rock Hospitality. Stand Rock operates the Wilderness and Glacier Canyon resorts in Wisconsin Dells, among other properties.
According to a news release, the project’s first phase will consist of a 121-room Homewood Suites by Hilton hotel and the 11,500-square-foot event space. The second phase calls for a Tru by Hilton hotel, which would total between 90-100 rooms.
Additionally, the conference center could see a future expansion of up to 5,000 square feet.
Construction on phase one is slated to commence in early spring, and is targeted to be complete in early summer 2021.
The assessed value of the project’s first phase is expected to be at least $14.9 million by the beginning of 2022, according to city documents. The second phase is expected to have a minimum assessed value of $8.5 million by the 2025.
The land for both phases will be acquired from an affiliate of Northwestern Mutual Life Insurance Co., which also owned the land where the Ikea was built.
The project will receive nearly $6.25 million in city assistance through tax incremental financing.
Included in that is an up-front grant of roughly $2.12 million, which the developer will use to acquire the property for the project’s first phase.
Work related to phase one will also receive up to roughly $2.35 million, while the second phase will receive nearly $1.78 million. The developer will receive these payments, which come through tax increment and other revenue such as hotel room taxes, only after the city’s debt service related to the up-front grant is paid off, said Andrew Vickers, city administrator.
The city will also hold a right to repurchase and a personal guaranty to secure that at least the first phase is built and the city can pay for its financing of the up-front grant.
Oak Creek Mayor Dan Bukiewicz said the city saw a need for this type of offering in the area.
“(T)here was a void,” he said in the news release. “Our strategy is to ensure week-long activity to support other food, entertainment, and retail venues, and when you can bring folks in from outside the area during the work week, it can really add to the vibrancy we seek to attract to Oak Creek, especially in the night time hours.”
Beyond the Wisconsin Dells-area resorts, Stand Rock’s portfolio also includes the Wilderness at the Smokies in Sevierrville, Tennessee; the Camelback Lodge & Indoor Waterpark in Tannersville, Pennsylvania; and the Hampton Inn & Suites in West Allis.
“We’ve been successful in West Allis. With that, we also have a firm understanding of the market segment south of I-94,” Pete Helland Jr., managing partner for Stand Rock, said in the release. “Our new investment in Oak Creek is like a logical extension of that market reconnaissance. We saw a great opportunity in this emerging market, and the desire to partner with Northwestern Mutual to help catalyze its progressive plans for this appealing site was very attractive.”