Wyndham to build 2 hotels with 400 rooms near Columbia River in Tri-Cities

A pair of hotels with nearly 400 rooms is planned for property on the Columbia River in east Pasco.

Meredith and James Sexton of JMS Development have signed franchise agreements with Wyndham Hotels & Resorts to build two hotels connected by a breezeway as part of the Osprey Pointe development.

Wyndham, based in New Jersey, is at the heart of a network of 9,100 hotels operating under a variety of names, including Wyndham, Baymont, Days Inn, LaQuinta, Microtel and Ramada around the world.

JMS has a development agreement with the Port of Pasco for a $450 million project to build a community of residences, hotels, restaurants, parks and an amphitheater on 55 acres at East Ainsworth and South Oregon avenues, west of Big Pasco Industrial Park.

Meredith Sexton is the lead for the hotel project, making it eligible for added support offered to women-owned businesses.

JMS has three years to start construction.

Phase 1 underway

In the interim, it is preparing the first phase of the project. This spring, it submitted plans for utilities, two apartment-and-commercial buildings and 70 single-family homes on the western side of the property for review under the State Environmental Policy Act or SEPA.

Future phases will add more housing, retail and restaurant space, a market and an entertainment venue.

The full development is expected to bring nearly 1,000 residences, commercial businesses and other amenities to the property.

The Sextons said they were contacted by Wyndham and several other hotel brands as word spread that the Osprey Pointe project would bring urban development to a picturesque stretch of the Columbia River.

They chose Wyndham and Wyndham Garden, saying it will let them to build the project they think best suits the site, and won’t require it to follow a cookie cutter set of plans. The franchise fees were reasonable as well, they said.

As franchisees, the Sextons will own the hotel and pay franchise fees to Wyndham in exchange for the use of its name, as well as marketing, reservations and other support. The hotels will be professionally managed.

The hotel operator confirmed the agreements with JMS, saying the plans include a 250-room Wyndham hotel and a 146-room Wyndham Garden. The more expensive rooms will be closer to the river.

Not exactly ‘waterfront’

The Sextons are avoiding the term “ waterfront.” The site plan for Osprey Pointe dedicates a 200-foot zone along the shoreline for park amenities so the two hotels will be near, but not on the shoreline.

The couple say they’re confident the hotels will succeed even if east Pasco initially seems like an unlikely destination for upper tier hotels.

A market study concluded it could support 500 rooms, in part because development slowed during the pandemic and in part because Fortify Holdings of Portland purchased six local hotel properties with a collective 800 rooms, most transformed into studio apartments that began leasing earlier this year.

They believe offering well-appointed rooms in full-service restaurants near the Columbia at rates commensurate with the Tri-Cities market average will be a winning combination. Too, they note, there are relative few lodging options on or near the river. Richland has four hotels near the river and Kennewick has one.

The Tri-Cities is a bright spot for a hotel industry still struggling to returned to pre-pandemic occupancy levels, according to an outlook prepared for Visit Tri-Cities.

It boasted the highest occupancy rate (66.7%) and second-highest increase in per-room revenue 12.4%) for Washington state in the first half of the year. The report notes that the inventory of rooms was reduced 4.4% by the Fortify Holdings conversion.

‘Great fit’

Randy Heyden, the port’s executive director, said the hotels are a great fit with its vision of a mixed-use destination neighborhood. The port must sign off on development under terms of the master agreement with JMS.

The two hotels will cost an estimated $75 million to build and will be financed with a mix of traditional bank loans and private funds.

Osprey Point is in a so-called Opportunity Zone, a federal program that encourages investment in distressed area in exchange for tax breaks on capital gains. The Pasco opportunity zone also includes the marine terminal and downtown. .

JMS launched Osprey Point OZ Holdings II LLC to raise $97 million for the initial phases of construction, including infrastructure, the initial residential buildings, homes and eventually, the commercial buildings and performing arts venue.

The fund is being marketed to investors under federal regulations that allow marketing to accredited investors who meet minimum income and net worth criteria. The minimum investment for the Osprey Point fund is $50,000.

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