MANASSAS — A new Tru by Hilton hotel will be constructed with financial help from the city and state.
Manassas leaders on Tuesday agreed to back a $1.5 million gap financing deal with hotel developer Holladay Properties, which is building the $14 million project at the Landing at Cannon Branch development at the intersection of Godwin Drive and Gateway Boulevard.
Holladay Properties will invest $2 million into the deal, while the Fauquier Bank is slated to provide a construction loan $10.4 million for the project, 75 percent of the total project cost.
The city Economic Development Authority will fund the $1.5 million gap financing deal through Virginia’s Tourism Development Financing Program. The funds will be paid The EDA loan will be repaid by the state and the city over the course of 25 years by the creation reimbursement of two 1-percent of the state and local sales, both dubbed the local contribution, coupled with a 1 percent “access fee” to be paid by Holladay Properties.
Holladay Properties will be held liable in the event it defaults on the loan, not the city or state, according to Manassas Economic Development Coordinator Nicole Smith.
Gary Jones, of the Fauquier Bank, and who is named in the bank documents outlining the hotel’s construction loan serves as the Vice Chairman of the city’s EDA.
The hotel market in Manassas is soft, and officials said this is what led to the need for the gap financing deal.
Most the region’s hotel growth has not been occurring in western Prince William County, but rather in the eastern side of the county, and in Stafford County, with all new construction in recent years centering near Quantico Marine Corps Base, which attracts federal workers who come for extended stays of at least a week at a time.
The planned 98-room Tru by Hilton hotel to be built in Manassas is now the centerpiece of the Landing at Cannon Branch after Heritage Brewing Company scrapped plans for a restaurant, brewery, and distribution center that was to serve as an anchor for the mixed-use development that also features homes, and planned retail space.
Set to break ground this year, the hotel will sit in 2.3 acres of land at the Landing at Cannon Branch. Try by Hilton is the company’s mid-range brand that caters to millennials.
Developers cited the growing Innovation Park at Prince William development anchored by the George Mason University Science and Technology Campus, and a soon to be built regional headquarters and training center for the U.S. Tennis Association.
The hotel will sit two miles north of the Manassas Regional Airport.
The city’s EDA is expected to approve the deal at its next meeting on Tuesday, March 19.
