Board sees first step as possibly obtaining 5 acres adjacent the Center; then deciding how it should be used; report claims, “Market justification exists for development of a hotel adjacent to Yavapai College’s Sedona Center;” Some on Board skeptical

At its March meeting, the Yavapai Community College District Governing Board members were presented with a detailed study commissioned by the College to determine the efficacy of possibly purchasing land and locating a hotel on property adjacent the Sedona Center.  The Board appeared most interested in purchasing an additional five acres adjacent the Center.  If a purchase was made, the Board would then decide its best use.

The study claimed that “Market justification exists for development of a hotel adjacent to Yavapai College’s Sedona Center.”

Third District Representative Paul Chevalier appeared to strongly oppose a hotel (owned by a third party who leased land from the College) while urging the College to pursue a possible purchase of an additional five acres.  His vision was to use the land, if it could be purchased at a reasonable price,  to consider expanding the existing culinary school. 

It was clear that no one on the Board (or College executives) wanted the College to consider building and owning its own hotel. 

Following below is a copy of the key findings in the executive summary section of the extensive report provided by the research team.  The entire report can be found in the March Governing Board Agenda by clicking here.

There is also a video of the Board discussion about the hotel following the summary.

Key Findings

Existing Conditions

Student housing exists only on the Prescott campus. The current inventory caters to more traditional college aged students (18 – 21 years old) with semi-suite units (100% of inventory) and lacks unit type diversity typically attractive to older cohort populations.

Between fall 2015 – 2019 the College’s housing occupancy percentage has decreased from 97% to 93%; with an average annual occupancy rate of 94%.

The majority (78%) of YC students are enrolled part-time and have an average age of 31 years old.

Yavapai College has the highest room and board costs compared to its peer institutions; 43% greater than the average of its peer institutions. Yavapai College has 221 student housing beds; 33% less than its peer average.

Currently Yavapai College does not offer any on-campus faculty/staff housing.

Housing Market

Regional population growth and limited multi-family housing development has tightened the housing supply in the market and increased pressure on those desiring a residence near campus.

Since 2015 there has been a population increase of 5% around both the Prescott and Verde Valley areas. During the same 5-year period, multifamily housing development has increased 6% and 5%, respectively, and vacancy rates have decreased in both areas.

The total cost to live in an on-campus semi-suite is equal to the average survey reported off-campus housing cost ($1,110/month). It is a value proposition issue as students consider the value from the cost of on- campus semi-suite and meal plan compared to the available apartments and the independence they have living off-campus.

Hotel Demand

Market justification exists for development of a hotel adjacent to Yavapai College’s Sedona Center. (emphasis by Blog)

Tourists represent the target market as tourism is the primary industry in Sedona attracting over three million visitors annually and accounting for 77% of the city’s sales tax revenue.

Three primary sources of demand were found to exist for a hotel; Individual Business Travelers (IBT), Group and Convention, and Leisure.

Housing Demand

 Insufficient demand exists to build new standalone on-campus student housing or faculty/staff housing facilities

Although there is a net demand for 74 beds of student housing on the Prescott Campus and 56 beds on the Verde Valley Campus, P3 Developers typically require nearly 400 beds of new development for projects to be financially feasible and self-sustaining.

YAVAPAI COLLEGE  HOUSING & HOTEL PUBLIC PRIVATE PARTNERSHIP  ANALYSIS

 The majority of student demand is from students who currently live with family/relatives, the group least likely to live in campus housing.

Although faculty and staff demand equals 25 units, P3 developers will require more scale to meet their required financial returns.

Faculty and staff indicate a lack of interest in on-campus rental housing despite survey tested rates being within range of renter’s current costs. On average renters reported total housing costs within 22% of survey tested rates. Faculty & staff focus on quality of life factors in their housing decisions, e.g. travel time to campus, but are still price conscious.