New hotel could fill 'gap' in extended stay inns in Janesville

JANESVILLE

When Janesville City Manager Mark Freitag first moved to Janesville from Alaska in 2013, he had to find temporary living quarters.

Freitag said at the time that he, his family and a house pet couldn’t find a walk-in lease at an apartment for fewer than 90 days. He knew it could take him a week, or maybe six weeks, to find a permanent home in Janesville.

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Freitag said he ended up starting his job as city manager while living at an extended-stay hotel in Sun Prairie—the closest such lodging available—as he looked for a home here. He called that arrangement “inconvenient.”

When the Marriott TownePlace Suites, an extended-stay hotel, opens on Janesville’s northeast side next year, it could help newcomers find stopgap living arrangements as they look for new digs in town.

Freitag and other city officials say they envision Janesville’s first extended-stay hotel will, among other things, serve as a boon for an economy that’s generating new jobs faster than new hires might be able to find permanent housing.

The Marriott is under construction now just south of the re-developed former Menards, tucked between North Pontiac Drive and Interstate 90/39. Freitag and others said during a groundbreaking ceremony Tuesday afternoon that the new hotel will fill a “gap” in the local lodging market.

“A lot of businesses bemoaned the lack of this particular type of product,” Forward Janesville President John Beckord said. “They (the developers) have hit the bull’s-eye.”

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The Marriott is one of two hotels that will be under construction this year. The planned Cobblestone Hotel is slated to break ground downtown in June in a former city-owned parking lot on West Milwaukee Street. The two hotels are being built by separate developers.

They would be first hotels to be built in Janesville in two decades, and they come at a time when hotel occupancy rates locally have climbed to 70 percent during much of the year.

A construction crew at the Marriott site Tuesday was building outer walls and an elevator and stairway tower. The 53,000-square-foot, 87-unit hotel will feature an indoor swimming pool and suites with kitchens. It will be tailored for guests who would be staying in Janesville for longer than a week, said Jeff Schrader, new business development director for developer Kinseth Hospitality.

Schrader said Kinseth, which is located out of Iowa City, Iowa, learned through market research that Janesville is undergoing the early stages of a major redevelopment project at the former General Motors plant. There has also been a rise in information technology contractors and health care workers moving to Janesville for temporary assignments, Schrader said.

“This (Marriott) is geared for somebody relocating to Janesville, somebody doing work that requires them to be in the area for an extended period of time,” Schrader said. “Something like your hospital employee. Typically, we find that hospitals end up bringing in doctors and nurses and technical people that are there for kind of medium- to long-term employment situations. Maybe those folks can’t find an apartment.”

Kinseth would operate the hotel, which is part of a multifaceted redevelopment of the former Menards property.

Madison developer Steve Doran and his firm, Galway Companies, over the last year redeveloped the former Menards as a set of four retail stores, including fast fashion retailer Ross Dress for Less. The former Menards had been vacant since 2008 until Doran bought the 72,000-square-foot building and 15 acres of land around it for $3.2 million in 2017.

Doran renamed the site “The Marketplace at Janesville.” Three stores have already opened there, and the fourth—Ross Dress For Less—will open sometime this summer, Doran told The Gazette on Tuesday.

The city negotiated a tax-increment financing package for Doran’s project and completed another TIF deal last year for Kinseth’s Marriott project. City Economic Development Director Gale Price said the two projects will add $15.2 million in total new taxable value to the property.

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Doran said he is a “silent investor” in the Marriott project. He said he eyed the former Menards for nearly a decade until he found retail tenants who thought the site would be a good fit. The city TIF deals were a catalyst for the Menards project and were instrumental in bringing the hotel development.

He called the area where the Marriott is being built “excess land” in his acquisition of the former Menards.

“We didn’t know what this (excess land) would be when we bought it,” Doran said. “Would it be apartments, hotels, mini-storage? We didn’t know, but we knew the city had wanted new hotel products. It came together very well,” Doran said.

The Cobblestone Hotel project in downtown Janesville is being developed by the Janesville Hotel Group. It could be completed in the early months of 2019, city officials said.

Doran said he and Kinseth believe there’s a big enough need for extra occupancy and different types of hotel services locally that two new hotels won’t oversaturate the market.

“There’s no worries about it,” Doran said. “(Downtown) is kind of a different market than this (Marriott) will be. We think there’s room for both of us. We wish them (the Cobblestone) the best of success, and I think they will be successful.”