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Airport authority pitches plan for hotel to developers

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The Lehigh-Northampton Airport Authority wants to build a hotel on land it owns at Lehigh Valley International Airport in Hanover Township, Lehigh County. The brown area is the spot near Airport Road where the development would go up.
The Lehigh-Northampton Airport Authority wants to build a hotel on land it owns at Lehigh Valley International Airport in Hanover Township, Lehigh County. The brown area is the spot near Airport Road where the development would go up. - (Photo / )

People staying in the Greater Lehigh Valley may soon get the opportunity for an up-close view of airplanes landing and taking off.

On Tuesday, the Lehigh-Northampton Airport Authority moved a step closer to its goal of building a hotel on land it owns at Lehigh Valley International Airport in Hanover Township, Lehigh County.

The airport authority said it released a request for qualifications for developers interested in building a hotel with retail space on a 15-acre site on Airport Road, within walking distance of the terminal. The hotel’s windows would offer a view of planes coming and going.

The request calls for a developer to build a nationally branded hotel with at least 125 rooms and between 5,000 and 20,000 square feet of retail space. The LNAA has not determined the exact location of the hotel and is leaving the specifics to developers, said Tom Stoudt, executive director of the LNAA.

The LNAA would consider offering public financial incentives for developers whose proposals include at least 10,000 square feet of meeting space.

While the LNAA would own the property, it would consider a long-term ground lease or other type of structured arrangement for the deal, he added. The airport authority is pursuing the project as a way of diversifying its revenue.

Hotels near Airport Road have an average occupancy rate of more than 80 percent and the Lehigh Valley vacancy rate for retail is below 4 percent, according to the RFQ.

Alex Michaels, president and CEO of Discover Lehigh Valley, said the overall hotel occupancy rate in Lehigh and Northampton counties for 2018 is 70.6 percent, a slight increase from 69.8 percent in 2017. The average daily hotel room fee in the two counties was $105 in 2018, up from $103 in 2017. The figures come from STR, a Tennessee-based firm that compiles hotel industry data.

These averages are “really strong,’ according to Michaels, and with hotels in the airport corridor in the 80 percent occupancy range, there’s strong evidence that a hotel on airport land would be successful.

“Airport hotels tend to perform pretty well,” Michaels said.

Michaels said there’s also a shortage of hotels in Lehigh and Northampton counties that can accommodate meetings, particularly for large groups.

“There’s not a ton of hotels that can host meetings,” Michaels said. “Most markets we go after have hotels with substantial meeting space.”

LNAA will host a pre-proposal meeting on March 14 at the airport for people interested in getting more information, Stoudt said.

The LNAA requires all responses to the RFQ be returned by April 26, he added.

“Once we receive those, then we will work through a timeline of creating a short list and then review the proposals and make final selection of a developer in August,” Stoudt said.

In August 2018, the airport authority approved an advisory and development services proposal from real estate firm Jones Lang LaSalle to market the property and land a developer. Once that was complete, JLL created the RFQ, which the airport authority reviewed and approved.

The RFQ is available on the airport’s website at www.flylvia.com.

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Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 4108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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