The leadership of the Perry Economic Development Inc. (PEDI) investment group presented a one-year report card on the status of the Hotel Pattee at Monday’s Perry City Council meeting, and the hotel’s prospects look rosy after 12 months under PEDI ownership.
The highlight of the presentation was the announcement that a management company has been chosen to operate the hotel and La Poste event space.
PEDI President Matt McDevitt, Vice President Deb Lucht and Past President Dr. Tom Burkgren were joined by the hotel’s general manager, Jenny Eklund, to deliver the good news to the city leaders, including the surprising fact that the hotel turned a profit in 2021 despite an anticipated loss.
In the nine months between PEDI’s purchase of the Hotel Pattee and La Poste on April 1, 2021, and the end of the year, the operation generated $1.2 million in sales and a modest profit, largely thanks to Eklund and her 33 employees, who gave their hearts and souls to the business, she said.
“I want you guys to understand that this hotel is working now because of all the locals involved in it,” Eklund said. “Thirty-three employees is 33 families that we’re taking care of. This is 33 people that care about the hotel, that are working to make it the best that we can do, and their family is so important to us.”
McDevitt said the hotel’s solid performance in 2021, coupled with financial support from the city and from some 100 donations from individuals and businesses, put the business in a good position going forward.
“The key to a lot of this is truly, and why Perry has been so successful in so many ways, is the public-private partnership,” McDevitt said. He said several important maintenance upgrades — including a new water heater and new chiller pumps — were made last year in the 108-year-old hotel, which was appraised in 2017 at about $4 million.
In order to get a sure grasp of the true state of the hotel’s condition, the city council later in Monday night’s meeting approved a $69,000 professional services agreement with Polk City-based ETHOS Design Group for a thorough study of the facility, in particular the building’s infrastructure needs. ETHOS performed similar services in recent years at the Perry Public Library and the McCreary Community Building.
With the current stability of the built fabric of the building and the operation of the business, the challenge lies now in making those conditions permanent, McDevitt said.
“The biggest thing is who’s going to run it?” he said. Several management companies responded to PEDI’s request for proposals, but none seemed like a good fit.
“We interviewed some groups,” McDevitt said. “We were underwhelmed by not only their response but also by their ability to try to know who we are as a city and as a property and why it’s important to us.”
Lucht said PEDI’s study of similar management arrangements elsewhere showed that “when it was successful, there was a definite connection with their relationship to the community. So if you have a company that’s managing from afar, they’re not invested in the community. So that was another thing that we were looking at. We couldn’t, in the right mind, just hire somebody for the sake of hiring to manage the hotel because it is such a viable part of our downtown that we want to make sure that it’s the right fit.”
As if to illustrate the old saying that if you want something done right, you have to do it yourself, Burkgren and Eklund have partnered with fellow Perry residents Sue Kimpston, Alan Peitz and Monica Peitz to form a management company — Perry Hospitality Inc. — to run the Hotel Pattee and La Poste.
“They are going to be the first group to lease the hotel,” McDevitt said.
“We felt that local management would be best,” said Burkgren. “We decided over the last couple of months, well, if not us, then who? And we really didn’t have a better answer.”
The quintet of local managers will take over as soon as the lease is negotiated with PEDI.
“Hopefully, once the city takes over, the lease will be assigned over to the city,” said Burkgren, who has been the operations manager since PEDI bought the properties. “That’s what our plan is right now.”
He said forming the five-person partnership depended largely on Eklund, who has been been the general manager for three years.
“The Hotel Pattee is like any business,” Burkgren said. “It really comes down to managing, inspiring employees, watching the finances and putting together a team that’s all in. Jenny is really doing that right now. You can tell Jenny is all in. I wouldn’t do this without Jenny agreeing to stay on as general manager and also being a partner with our corporation. We feel like the town, the city really benefits by having local management.”
Perry Mayor John Andorf thanked the PEDI leadership for the countless hours they have invested in putting the Hotel Pattee and La Poste on a stable footing in advance of the city’s eventual ownership of the properties.
“I think we all knew this already,” Andorf said, “but once again it’s clear that the management group, our presenters tonight especially, have a great deal of passion towards the hotel and Perry and making this work. I’ve seen all along the passion and how hard these people work to move things forward, and for that I thank you.”
