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Will Milton check in to hotel?

MILTON — The city of Milton could be moving forward with efforts to bring a new hotel to the area.

In a presentation Tuesday, Madison hotel developer Inn Development and Management Group told the city council that a feasibility study shows the city could likely support an 80-room hotel along the future Highway 26 bypass.

Based on occupancy levels and the age and condition of a sampling of other area hotels, there is demand for another midsize hotel in Rock County, group Vice President Sean Skellie said.

The city in June paid $12,500 and the Milton Area Chamber of Commerce, Industry and Tourism paid $2,500 to have the group do a feasibility study on a potential hotel in the business park at the interchange of Highway 59 and the future Highway 26 bypass on Milton's east side.

Milton has no overnight lodging, but it has discussed building a hotel as part of a larger development plan tied to the pending bypass.

While hotel development has been one of the most sluggish markets in the recession, conditions could soon be favorable locally for hotel development, Skellie told the city council Monday.

A survey of six Janesville-area hotels shows average occupancy at about 60 percent, he said.

"Sixty-six percent is maxed out, and that's when you start seeing other hotels developed," Skellie said.

Many of those hotels have changed hands several times and are aging with limited services, he said. Milton's proximity to Janesville and Madison businesses and the regional vacation hub of Lake Koshkonong makes it a suitable site for a hotel that would house business travelers and vacationers.

The study found that Milton would be best suited to a midsize hotel without an attached restaurant, Skellie said. Amenities at such a hotel could include:

-- A "living-room-style" lobby lounge.

-- Space for a small bar and breakfast area.

-- A 1,500- to 2,000-square-foot meeting space.

The group's study estimated that such a project could cost a developer $8 million, Skellie said. In Milton, it could reach a benchmark of 60 percent occupancy within three to five years.

Rooms there would book at between $100 to $110 over the same time period, he estimated.

A sampling of similar hotels in the Janesville area showed an average room price of $76, Skellie said.

Tuesday, the council voted to keep the group as a consultant in plans to draw in a hotel developer. The city has not yet forged plans or agreed to terms of a recruitment effort.

The group, which officials said relocated from Fort Atkinson to Madison this year, manages and develops hotel properties and redevelops vacant properties into hotels.

It's possible the city would work in tandem with the group and the chamber of commerce on the plan, City Administrator Jerry Schuetz said.

If the city moved forward with recruiting developers, it could take between six and 18 months to land a hotel, Skellie told the city council.