Pine City market ready for its first hotel in more than 40 years

Pine City is ripe for a hotel, according to a market study of the area.

“We’ve been ready for some time,” asserted Nathan Johnson, Community Development Director.  “Now we just have the data to back it up.”

Consultants examined four sites, two on the north and two on the south side of town.  The sites were the JPL site at on the 1200-block of 8th Street NW (site 3 below) and the Pine City Freeway Investments site on the 1300-block of Northridge Drive NW (site 4) near Exit 171; and the RCF Holdings site on the 1200-block of Hillside Avenue SW (site 2) and the Pine City Interchange site at 1542 Hillside Avenue SW (site 1) near Exit 169.

Hotel Sites

Pine City, in partnership with the EDA, Initiative Foundation and Greater Pine Area Endowment, hired Growth Services Group (GSG) of Missouri in January to determine the feasibility and possible success of bringing a hotel to town.  Consultants determined the town could sustain a 42-room hotel with a business center, banquet space to accommodate greater than 25 people, hot breakfast, fitness room and a pool.

Despite a number of other hotels within 20 miles of Pine City, including a giant 563-room hotel at Grand Casino Hinckley, consultants pointed to a 6.5-percent increase in area lodging from 2009 to 2015 as a reason the market area could sustain another provider of overnight accommodations.

“With wedding venues, major community events, the North West Company Fur Post, a growing business community and our area lakes, we have plenty of travelers to house for the night, especially in the warmer months,” explained Johnson, adding, “Not everyone wants to stay at a casino 15 miles away.”

GSG’s report recommendations said, “Review of demographics and community interviews suggested that a mid-level to upper mid-level hotel would be ideal and provide the amenities to meet the community’s needs.  This type of hotel would be well received and provide a new tier to effectively draw guests back to Pine City from the nearby surrounding markets.”

The cost to develop such a hotel would be about $109,000 per room, or about $4.6 million for a 42-room building.  Consultants predict five years after the development the hotel will have an average yearly occupancy rate of 65.7-percent and the average daily rate would be $101.83.

Pine City had a number of hotels in its early years, the last of which was the Agnes Hotel which stood until 1974.  Two roadside motels remained since then, one 20-room facility (the Old Oak Inn) which is set for demolition due to redevelopment of the site, and another 12-room facility, the Gail Motel, which has operated since 1955.

“Given the positive results of the study, the uptick in commercial and residential development activity along with all the city has to offer in amenities, including the wide range of annual events that draw visitors to our great community, our hope is that hotel developers will be drawn to our market,” said Mayor Carl Pederson.

Copies of the study are available on the City’s website.  Contact Johnson at 320.629.2575, ext. 105, or by emailing njohnson@pinecitygov.com with questions regarding the study.

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