OAKHURST – What would the building of a conference center and team building facility in Oakhurst mean to the economy of Eastern Madera County? And are the citizens and the Board of Supervisors amenable to a 50 percent revenue sharing agreement on the Transient Occupancy Tax (TOT) in order to make it happen?
Those questions will be addressed at a Board of Supervisors meeting at the Oakhurst Community Center on Tuesday, Oct. 16, and were discussed during a sit-down last Saturday with Gautam Patel, who is heading up the group of investors on the proposed project.
Patel says this will be a facility unlike any other in Madera County. It will include 120 new rooms adjacent to the Hounds Tooth Inn, which Patel already owns.
The conference center would accommodate 500 people and draw corporations from across the country – and perhaps especially from the Bay Area and Silicon Valley – who are already utilizing these types of facilities, says Patel, “and the demand is growing.”
“Companies such as Facebook hire at a significant rate, and they’re always going to be putting those new hires through training activities,” says Patel.
“The way new hires are integrated is to do these types of retreats that are both work and play. These companies want a venue in which you’re still working and being productive, you’re improving your performance as a team, but you’re in this incredible location.”
Patel says a designer for Facebook is working with his team, and knows exactly what types of facilities these companies are looking for.
“It’s not just an empty room with 500 chairs facing forward. That’s not the way meetings are done anymore. Of course there will be one large room that is traditional, but there will be smaller breakout rooms for actual work-in groups – functional environments for people to work. The more you can cater to the way they already work, the more likely they are to use your facility. There is no shortage of demand in this area; already plenty of groups are wanting to come here.”
Patel says that the team building activities with be available not only to conference attendees, but to anyone who stays at the hotel and as a public amenity.
The facility would include multiple food and beverage concepts – a café, bakery, coffee shop and restaurant – plus a Yosemite Tribute Center (mini-museum), upscale fitness facility, spa and massage, and a wedding venue.
Concerns have been raised that 120 new hotel rooms would create unfair competition for existing rooms, especially with three new hotels under construction in Oakhurst.
“The product is so different, it’s really not a fair comparison,” says Patel. “Our demographic will be very different from the existing hotels in the area. This will be an upscale, boutique hotel with an aesthetic very different from anything in Madera County. We’re looking to build something very unique that will cater to a demographic that is underserved in this area, or not served at all.”
For those who hold out the Tenaya Lodge and the Chateau du Sureau as examples of higher-end lodging, Patel points out that the Tenaya Lodge is in Mariposa County and tax revenues don’t benefit Madera, and the Chateau has just 13 rooms.
So why should the County rebate half the TOT over 25 years in order to have this facility built?
Patel contends that these types of venues have been built in the past by cities and counties through bond measures which had to be paid back.
“We’re not actually getting any money,” says Patel. “This is not a bond measure that has to be paid back; there is no upfront money. We want to build something that will be good for the community and we’re paying upfront and taking all the risk. If it doesn’t work out, we take the loss. All we’re asking for is to be reimbursed over 25 years if we are successful, and the amount being reimbursed would not be generated without this project. We’re not taking away from the general fund, only adding to it.”
Patel says the project will increase the amount of money the County has for discretionary spending for things such as the fire department and schools, plus the income from property taxes, sales tax and TOT. It will also benefit other Oakhurst businesses and hotels through higher visitor rates, he says.
“The conference center itself is a loss leader. It’s the hotel rooms and the services that make it financially viable. A private developer will never build a stand-alone facility because it would never generate the money it needs. If it were a good business model, somebody would have done it already. From a hotel perspective, they almost give away the facility space, because of the rooms. That’s the way the industry works.”
With just 120 rooms added by this project, there will be a need for 380 more during a conference of 500 people, says Patel, and that will benefit the other hotels in the area in addition to the ancillary spending at grocery stores, gas stations, local shops and restaurants.
The agreement with the County would require the property value to be at least $20 million when it is complete, says Patel, which would generate a minimum of about $215,000 in property tax annually, in addition to the TOT and sales tax.
Some have said that this project would provide only low-level, minimum wage jobs. Patel says this couldn’t be further from the truth.
“You have sales and marketing, revenue management, hotel operations, HR, food and beverage, finance and accounting, team building staff – this is not a select service hotel. These are not minimum wage jobs.
“For example, marketing nowadays includes web development, maintaining websites, SEO, generating content creation, social media marketing – there are so many disciplines within each of these fields. The hospitality industry is not just management and housekeeping. And these are jobs with a future. At one of our properties in Omaha, the manager started as a housekeeper. The director of operations started as a table waiter. You always want to hire and promote from within.”
Patel anticipates 75 to 100 jobs will be created, and says that is likely a conservative number.
He also plans to create a paid internship program and has been in discussions with Darren Soukup, Director of Oakhurst Community College, about how they might work together to provide students with real-world experience under seasoned professionals.
Another benefit to the county would be future revenue, says Patel.
“When people come here for conferences and love the area, they may bring their families back next year on vacation.”
“It’s an incentive to develop this corridor and make productive use of this land,” says Patel, “and it’s already zoned commercial. When they did the community plan years ago, they anticipated that something like this would be built here. It was approved many years ago as a permitted use.”
Patel says they have been talking with Caltrans and will do whatever is required in the best interest of safety and mitigating any traffic concerns, including possible dedicated turn lanes for which they are open to giving the land to make that happen.
He also says they will do whatever the County requires as far as fire protection and permitting, and that they are not receiving any exemptions on fees.
As for concerns that he is related to the Patel who has been building the three hotels just south of his location, Gautam Patel wants to be judged on his own merits and notes that this is completely different group of investors.
“The guilt by association – that tactic is not fair. Patels are very much in the hospitality industry, and I’m related to tons of them. I just want to be judged on my own merits, and for this project to be judged on its own merits.”
Patel says he is very confident in the success of this venture, and that his estimates on daily occupancy, tax revenues and TOT are conservative; he expects they may be much higher.
“We want to under-promise and over-deliver,” he says. “If we’ve over-promised, our TOT rebate will be affected proportionally. We’re betting on ourselves and paying it upfront so it has to work for us. The incentives are aligned. This could make Oakhurst its own destination.”
For those who wish to learn more about this proposed project and voice their opinions, there will be a Board of Supervisors meeting/ hearing on Tuesday, Oct. 16, at the Oakhurst Community Center from 5 to 7 p.m.