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$8.4M hotel eyes Loy Lake Road

Michael Hutchins
Herald Democrat
Crews work to move metal beams at the site of a proposed hotel along Loy Lake Road Friday.

As progress on a hotel and convention center stalls in South Sherman, another hotel project may be taking shape.

This week, a $8.4 million building permit for the first new Sherman hotel in two decades has been issued. The hotel, a member of Courtyard Marriott chain, would be built on Loy Lake Road just north of the Sherman Town Center, city officials said.

"There is a tremendous pent up demand due to how long it has been since we've had a new hotel," Sherman Community and Support Services Manager Nate Strauch said. "So, despite the challenges, additional lodging options will be primed for success, especially so close to the Sherman town center."

The new building permit is the latest in a series related to the hotel project dating back to 2011. Permits and documents for the project were previously filed in 2011, 2015 and most recently in 2017, prior to the latest effort, Strauch said.

During the 2017 efforts, some site work, including paving and some utility work was completed but the site has otherwise remained undeveloped for the past three years Strauch continued.

Josh Nickels, construction manager for Sawatzky Construction, said the initial dirt work and paving was a part of the first phase. Now, the owner of the property is ready to move forward with development using a new construction company.

"I think they've always been trying to complete the project and now was just when they were able to get a contractor for that second phase," he said.

Documents for the project that have been submitted with the city call for a five-story hotel building with 117 rooms and space for 119 vehicles. While Strauch had little information on other amenities, he said plans indicated that there would be a fire pit on site.

Nickels said plans also call for conference room space and an indoor pool, among other amenities.

Development on the hotel project comes amid a difficult period for the hotel and hospitality industry during the COVID-19 pandemic due to travel restrictions and reduced market demand. 

Earlier this summer, city officials said a proposed convention center and hotel in the Bel Air development along FM 1417 would likely not be in the cards due to changes in the market.

Strauch said he does not expect the Loy Lake hotel to be an effort to replicate or replace what was expected for Bel Air's conference center. While he would not rule out some meeting space in the hotel, it would not be to the level of what was proposed in Bel Air.

"As we have seen with the Bel Air development, the hospitality sector across the country is not in a good place right now because of the lack of travel due to the COVID-19 outbreak. However, a new hotel has been something that Sherman has needed for a good long time."

The new hotel could prove to be a boon to the city for its marketing, tourism and promotions efforts, city officials said. The hotel, if successfully developed, would provide the city with another source of Hotel-Motel Occupancy Taxes, also known as HOT taxes.

These funds are used by the city for projects and uses that are aimed at encouraging growth in tourism, advertisement and other activities that would lead to increased hotel stays within the city. One of the larger users of the HOT funds is the city's annual Hot Summer Nights concert series.

"The more things we can do to bring people into Sherman for overnight stays, the better we will be for being able to afford quality of life things like Hot Summer Nights.," Strauch said.

Currently the city raised about $500,000 in HOT taxes each year through hotels throughout the city. If successful, the Marriott could bring in about $100,000 in additional HOT revenues, Strauch said.

Construction on the project is expected to take about 13 months to complete, Nickels said.

"Since the slab, parking lot and dirt work is done, it will help us with that construction time frame," he said.