hotel to open as bookings pile up

A Prineville couple with three other hotels in Central and Eastern Oregon will open their fourth on Monday in this fast-growing town. And the city's expectations for the hotel are high.

The 72-room, three-story Inn at Cross Keys Station, located across from Safeway on U.S. Highway 26, will be the first new hotel in Madras since 1986 and will include a conference center that city leaders say will attract business and satisfy the city's growing need for group meeting space.

Rich and Sandy Priday -- a husband-wife team who also own and operate Best Western hotels in Prineville, La Pine and Burns -- say the city is long overdue for a new hotel.

"We've been looking at Madras for a long time, for at least five years," said Rich Priday. "We knew at some point in time they were going to need another hotel."

Occupancy rates at key lodging properties around the city are running around 70 percent throughout the year, Priday said.

Tax collections from lodging properties in the city were $171,826 in the 2006-07 fiscal year, which ended June 30, according to Jefferson County records. The county has collected a 9 percent room tax from lodging properties in Madras since 2001-02, according to Deena Goss, the county treasurer. The rest of the county has a 6 percent room tax.

The city's room tax contributions were 15 percent higher than 2005-06, when the county collected $149,272, and were up 52 percent from 2001-02, when the county collected $113,113.

The opening of the Deer Ridge Correctional Institution, new growth in town and funding available for building a conference center from the city's urban renewal agency "made the deal look like it would work," Rich Priday said.

Work crews were still putting the finishing touches on the 50,000-square-foot hotel's interior last week, mounting black and white photos on the walls and setting up old gun and poker chip displays in preparation for Monday's opening.

Each of the hotel's 72 rooms was outfitted with a flat-screen television and wireless Internet access, said Sandy Priday. The hotel also includes a small pool and exercise room.

The inn's completion is notable in a growing town that hasn't seen new hotel construction in more than 20 years, and the nearest convention space is at Kah-Nee-Ta High Desert Resort & Casino on the Warm Springs Indian Reservation.

They're basing their hopes for success on tapping into Central Oregon's $498 million tourism industry and the growth already occurring in Madras.

"I know a lot of people go to Bend, but Madras is the gateway to Central Oregon," Sandy Priday said. "We hope to draw from all over the state, not necessarily just people coming to Madras as a destination, but the resorts in Central Oregon. There's also the businesses in the area that have had to send their convention and group meeting business to Kah-Nee-Ta, Redmond and Bend."

By 2025, Madras is expected to double in size from its current population of 6,107, according to a population forecast that city leaders say is a conservative projection.

That growth will be spurred by Yarrow, an 890-acre, 1,730-home subdivision that has started home sales on the east side of town.

"There are a lot of rooms in Madras, but it's nice to have something that feels a little bit more upscale," said Cameron Craig, project manager with Madras Land Development Co., which is developing Yarrow. "We're offering a selection of higher-end homes, and when folks come into town, they'll want to know that their guests are going to have a nice place to stay."

Business could be "skimpy" in the first few days, said Rich Priday, but convention business in October and a movie shoot in Madras in November will solidify bookings during the months when Central Oregon's tourism industry typically slows, he said.

The recent opening of the Deer Ridge prison will increase the city's population and bring more business to the hotel, he said.

The state's Department of Corrections has made three separate bookings for 40 people in October and November. State employees are in town for training and will spend four nights at the hotel and use the convention facility, Rich Priday said.

Other groups include the Jefferson County Republican Party, Soroptimists International, Mountain View Hospital District and several wedding receptions, he said.

A film crew, in Madras in November to shoot "Management," a feature film starring Jennifer Aniston and Steve Zahn, will take 28 rooms for 21 days during its shooting, he said.

About 10 percent of the hotel's $5 million in construction costs will be funded over five years by a $525,000 grant from the Madras Redevelopment Commission, the city's urban renewal agency.

The urban renewal district has spent $4.1 million on several projects, including property acquisition and blight removal in the downtown area, landscaping on the North Y Avenue intersection, and a grant and loan program for various businesses in the downtown area.

The grant was awarded with the criteria that the Cross Keys group include a 200-person meeting room in its hotel, said Tammy McHaney, community development specialist for the city.

"There are no meeting rooms of any sort for large groups in town or visiting town," McHaney said. "As the city grows, it's essential to have a meeting room. It's something that the people of Madras need, and it will bring revenue to the city."

Owners of the Best Western Madras Inn hope the new hotel and conference center does not take away from their business.

The 47-room Best Western has seen strong business from the Deer Ridge prison construction, said Clifford Reynolds, general manager.

"It goes without saying that they'll take a piece of everybody's pie," Reynolds said.

But the new hotel and conference center could help attract more visitors and increase room tax revenues for the city and county, said Chong Reynolds, owner of the Best Western.

"They have to know how to sell their meeting room in order to bring more traffic," Reynolds said. "We're looking for them to do a good job because it will bring more money to town."

Cross Keys' owners say the convention facility will generate overflow business that will benefit all other hotels in the city, including Best Western.

"We want a good relationship with other hotels in the city. We will work with them to give them rooms. Seventy-two rooms is not that many rooms," Rich Priday said.

Mayor Jason Hale, who owns Ahern's Grocery & Deli just next to the new hotel, said he expects the new hotel and conference center to benefit all businesses, including other hotels.

"The more businesses we have here, the more it will attract people," Hale said. "Every business is unique. I don't see how it could hurt our city's diversification."

The new hotel and conference center will add about 20 new jobs, Rich Priday said. Cross Keys will be part of a 20-acre development that could include stores, a bank and possibly a drive-through restaurant fronting the highway, he said. Part of the 20 acres also could include a townhome development.