City considers Swiftel convention center, hotel

With a convention center and a Courtyard by Marriott hotel– immediately to the east of the current structure, this would be what the Swiftel Center could look like 18 months from now. The plan for an adjoining hotel and convention center was presented to the Brookings Council Tuesday by Paul Hegg of the Hegg Companies of Sioux Falls. Illustration by Van De Walle Associates

• Proposal comes back to council at Sept. 25 meeting

BROOKINGS – Eighteen months from now, if all goes according to plan, Brookings could have a new convention center and a 100-room hotel adjoining the city-owned Swiftel Center.

That plan got its first public airing Tuesday at the monthly study session of the Brookings City Council.

Presenting the proposal – a partnership between the city, the Hegg Companies and private investors – was Paul Hegg, CEO of the Sioux Falls development group.

“Now is the time to strike,” Hegg told the council, calling the plan for a convention center and hotel “an awesome opportunity” both for his group and the City of Brookings.

The Tuesday night presentation was actually set up for the council not only to get a firsthand look at the proposal by Hegg and the investors, Prairieland Partners, but to consider the details of a memorandum of understanding (MOU) that would set the project in motion.

Several months ago, the city council, as part of its economic development strategy, decided to create additional opportunities for hotels in the community. The councilors reasoned that additional lodging options would increase tourism and visitor commerce and subsequently solicited requests for proposals from developers and hoteliers.

Hegg’s group was the only response, but it was a dramatic one.

The Hegg Companies and Twin Cities-based Prairieland Partners are proposing:

• A 100 room, full-service hotel – a Courtyard by Marriott or equivalent property – immediately east of the Swiftel Center; it would occupy about three acres of land currently owned by the city.

• A convention center, or executive conference space, adjoining the Swiftel Center. The convention center would be built to city specifications, with furnishings, fixtures and equipment provided by Hegg and Prairieland.

The developers would finance and build the facilities. Hegg would manage the hotel, which would be privately owned, but the convention center would be leased by the City of Brookings (on a 15- to 20-year lease-purchase arrangement) and operated by the Swiftel Center’s VenuWorks management team.

The hotel, Hegg said, “would be a step above anything Brookings now has.” It would include suites as well as single rooms, a restaurant and lounge, an enhanced kitchen, a large aquatics center with fountains and slides and an in-house fitness center.

The business center would emphasize cutting-edge visual technology.

“We are really excited about this,” Hegg told his audience.

In his presentation Hegg argued that the additions to the Swiftel complex would have a multi-million-dollar impact on the community, and he pointed to studies that indicate a convention center of the type planned should bring 15,000 more visitors to the community annually.

Hegg noted that “90 percent of the current users of the Swiftel Center have said they would like to see attached accommodations.”

Although it is primarily a Sioux Falls operation, the Hegg Companies are well known and well respected in Brookings. The founder is Peder Ode Hegg, who was born and raised in Brookings County.

Investor Prairieland Partners – whose principals are Peter Mork and Steve Schwanke – already has properties in Brookings. Prairieland owns the Southland Court development on Eighth Street South, which includes more than 200 apartment units in seven buildings.

Hegg companies will be the management company for the project, and both Hegg and Prairieland Partners will participate in the financing arrangements, design of the project and construction management.

While the Hegg plan has generated real excitement among city leaders, it is far from a done deal. The memorandum of understanding between Hegg and the city has yet to be signed – it will be brought to a vote at the Sept. 25 council meeting. But even when the development agreement in place, either party will be able to step away from the deal if they find it isn’t in their financial interest to proceed.

That was the point made by Councilor John Kubal, who noted several provisions in the memorandum of understanding permit the parties to call a no-harm, no-foul halt to the joint venture.

Kubal, who has been an outspoken opponent of subsidies for the Swiftel Center, said he wants community residents to give their councilors feedback on the hotel-convention center proposal.

“I want to get some idea of what the residents of Brookings want the Swiftel Center to be and what they want it to provide,” Kubal explained.

The project would also require some participation from the Brookings County Commission, which still owns the Resource Center on the east side of the Swiftel Center. The county meeting rooms and offices would be redesigned as part of the new convention center.

Preliminary meetings with county officials have met with a positive response, according to City Manager Jeff Weldon and Mayor Tim Reed, and it’s believed some type of agreement can be worked out between the city and county for sale or lease of the space.

The timeline for the project is loose, because details of virtually every aspect of a complicated joint venture agreement have to be negotiated – from tax abatement discussions to the creation of a new Business Improvement District to the sale of city land for the hotel and convention center.

In his presentation to the council Tuesday, Hegg set several target dates:

• October 2012 - Design development to begin

• February 2013 - Foundation drawings to be complete

• March 2013 - Site work to begin, with actual construction under way by April

• February/March 2014 – Final occupancy

The developer noted it will be important to resolve issues with the city quickly, since publicity and promotion for the new facilities must begin a year in advance of the opening.

The council will vote to sign the MOU with Hegg and Prairieland Partners at its Sept. 25 meeting.



Contact Ken Curley at kcurley@brookingsregister.com.