Plan to build lodging at Fort Lee concerns hoteliers

The proposed construction of a large lodging facility at Fort Lee has triggered concern among hotel industry leaders and local government officials in the Tri-Cities.

The Army is contemplating building a 1,000-room facility at Fort Lee to support a projected student growth at the installation because of the 2005 Base Realignment and Closure Commission process.

The federal government is spending $1.2 billion on construction at Fort Lee to welcome military students and other military personnel and families from installations in Texas, Maryland, Alabama and Virginia.

The idea for the facility has circulated for several years but is now nearing approval, and area leaders are weighing whether it would have a negative effect on the local hotel industry, particularly on recently built hotels that projected major business from Fort Lee.

For hotels within a 10-mile radius of the base, Fort Lee is an important client, said David Schulte, executive director of the Petersburg Area Regional Tourism Corp.

"I have been told anecdotally that some [hotels] have been constructed with the anticipation to sell to Fort Lee," he said.

A new lodging facility -- which if approved would be built next to the new Army Logistics University near the Mahone Avenue gate -- would help the installation meet its housing needs, particularly as the base population grows, garrison commander Col. Mike Morrow said last week.

Currently, Fort Lee has 577 on-base lodging units, which are insufficient to accommodate the demand for short-term stays.

On average, an additional 450 rooms per night have to be reserved at hotels, according to the Fort Lee Management Plan 2008, an official report prepared for the Crater Planning District Commission by Alexandria-based consultant RKG Associates.

Morrow said that by 2011, when the BRAC process is expected to be completed, there would be an average of 2,300 students daily who will need temporary lodging.

Based on those numbers, he said, the Army likely still would need to contract with local hotels.

"You can't predict a specific event," he said, declining to speculate on whether the hotel business may be negatively affected by an on-post lodging facility.

"What we will see is a continued increase of visitors that will be coming to Fort Lee," he said, noting that he expects more visitors to stay at local hotels because of the expansion at Fort Lee.

The base will go from having about 4,100 students a day to more than 11,000 in 2011.

Congress has yet to approve the project, but Fort Lee officials hope to have the facility open by 2012, Morrow said. The Army gave preliminary approval for the construction of a 1,000-room building, although it has considered building up to 1,700 rooms.

Since the announcement of the expansion of Fort Lee, there has been more hotel construction in the region.

A sizable portion of area hotel owners may have believed they would be accommodating an influx of soldiers resulting from the expansion, Colonial Heights City Manager Richard A. Anzolut Jr. said.

"There is a component of the lodging industry that is concerned that [a new base hotel] will affect lodging revenues," said Anzolut, who is also president of the board of directors of the Petersburg Area Regional Tourism Corp.

Several local hotel owners said last week that they are worried fewer soldiers will be requiring their services if the hotel is built. Some mentioned the possibility of going bankrupt if Fort Lee business is no longer available.

Without any construction of on-base rooms, the installation would be able to accommodate only about 55 percent of the annual demand in 2011, according to the RKG report.

But if Fort Lee builds more lodging on base, the area's hotel industry would suffer losses, the analysis says.

"If a substantial number of lodging units are constructed on-post in the future, the region's hotels must be prepared to deal with increased vacancies and dropping room rates until regional demand is able to grow to fill the gap," the report states.

Hopewell City Manager Edwin C. Daley said the RKG analysis validates the concerns in the private business sector and in the communities. "I think it is a concern to be aware of," he said. "If you take Fort Lee out of the equation because they are now providing their own lodging services, the private sector will have to figure out what to do with their facilities.

"They would all have to do some adjustments, and how the adjustment would happen, we don't know," he said.

"If I owned a hotel," he added, "I'd be concerned."

Contact Luz Lazo at (804) 649-6058 or .