Eagan: Developer poised to build hotel by new outlet mall

Bill Morrissey says he knows a good thing when he sees it.

The 59-year-old businessman sees the massive outlet mall under construction near Cedar Avenue and Minnesota 13 in Eagan -- and he wants a piece of the action.

Morrissey, owner and president of a St. Paul-based hospitality management, development and consulting company, has put in motion a plan to build a hotel next to the Twin Cities at Eagan outlet mall, an open-air outlet shopping hub that will feature more than 100 stores in 409,000 square feet of retail space when it opens in August.

Last week, Eagan's Economic Development Authority reviewed Morrissey's concept plan for the proposed Home2 Suites by Hilton hotel and authorized city staff to enter into negotiations with him for the sale of city-owned land where it would be built.

If the $14 million project comes to fruition, it would be Eagan's first new hotel since 2002 and the first in the city's coveted Cedar Grove Redevelopment District -- a once-struggling area that city officials have been working on for nearly two decades but is now taking shape with the outlet mall's opening on the horizon.

It also would be Morrissey's first foray into hotel ownership. Morrissey Hospitality Cos., which began in 1995, has a portfolio that includes the St. Paul Hotel and several restaurants, including the St. Paul Grill, Pazzaluna and Tria in North Oaks.

"In every thing else we do, we manage for others," Morrissey told the EDA, which is made up of council members. "But we really believe in this and believe in the future of the city and what you've done here."

Morrissey was quick to note that he was raised across the Minnesota River in Bloomington and has lived in Eagan for 30 years.

In a letter of intent, Morrissey Hospitality Cos. has offered to buy half of the city's 1.8-acre parcel for just over $491,000. The company would retain the other half of the land for future development, possibly a second hotel.

The targeted site is adjacent to the city's 1,543-stall parking ramp being built to accommodate visitors to the outlet mall.

Besides being next to the outlet mall, the land is appealing because of its proximity to Mall of America and Minneapolis-St. Paul International Airport, Morrissey said.

"We believe it's the right time and right location and the right product," he said.

Hilton has about 40 Home2 Suites around the country, but none in the Midwest.

"This truly would be a new product in the Twin Cities," Morrissey said.

The 123-room hotel would be four or five stories high and feature a "contemporary" lobby, a fitness center, a swimming pool and meeting space, he said. It would employ up to 25 full-time employees and generate an estimated $300,000 in property taxes annually.

Like mall owner Paragon Outlet Partners, Morrissey Hospitality Cos. would help pay for and share the $19 million parking garage, which the city will own and maintain. The company would chip in about $489,000 for the use of 129 stalls.

Morrissey said he visited Paragon's Outlet Partners' outlet mall in Grand Prairie, Texas, earlier this year and "kicked the tires."

"We talked with the shopkeepers who are very pleased with the development and we talked with local hotel operators who said it's a draw. ... It does draw people to the region," he said.

Eagan Mayor Mike Maguire called the hotel a "great fit." The mall, the hotel and a proposed 180-unit apartment and retail development are "going to make that district be the envy of redevelopers throughout the area," he said.

"I think it's an added benefit, quite frankly, that we have such a qualified hotelier who is interested in doing it," Maguire said.

The occupancy rate at Eagan's 15 hotels traditionally runs about 70 percent, said Brent Cory, president and CEO of the Eagan Convention & Visitors Bureau.

"We've had a very strong year," Cory said, adding that this year's occupancy rate is nearing 75 percent. "And, needless to say, with the mall coming on line next August, we'll definitely see that increase even more."

The visitors bureau is preparing for the outlet mall by increasing next year's budget by 5 percent. More than half of the bureau's approximately $900,000 budget will go toward a separate marketing and outreach campaign tied directly to the outlet mall.

It plans to focus on what Cory calls the "drive-time market," or people who live within 12 hours of Eagan, by expanding the reach from five to 10 states and Canada. Canadian shoppers in particular love outlet malls, he said.

"What excites us most is shopping is actually still the No. 1 driver for leisure travelers," he said. "People always want to shop. And they need somewhere to stay and eat and fill up their cars with gas."

Reported by:  Twincities.com