Explained
The hotel’s cash flow and performance have fallen well short of initial projections, according to Jones Lang LaSalle, the firm commissioned by the city to evaluate the property. If sold, JLL estimated, “the value is somewhere between $22 [million] and $24 million.”
“In 2024, the occupancy was 42.8%. ... The original projection was that the hotel would operate at about a 70% occupancy,” the firm’s representative said, sharing that the hotel “made essentially a profit of about a million and a half dollars” this year.
City Administrator Gary Scott said the hotel has lost 83% of its original value, and would require a “refresh” of about $15 million in 2028 for repainting and new furniture, per its contract. Council members expressed frustration over the loss.
“This hotel has become the worst and most expensive financial investment in Conroe’s history,” council member Harry Hardman said.
Council members and staff reiterated that current leadership was not involved in approving or managing the project.
“Councilman Arthur and I ran for this office to uncover the truth, report the facts to the citizens and hold those responsible accountable,” council member David Hairel said, adding the hotel’s value now represents “17 cents of every dollar that was spent.”
Hairel said the city’s total indebtedness is $166 million when including bonds issued through the Conroe Industrial Development Corp.
While no action was taken, Mayor Duke Coon said the council would work quickly toward solutions.
“We have clearly identified the problem, and I look forward to how we remedy this issue,” he said. “This is an important time for our city, and I’m proud we’re addressing it head-on.”
