NAU President John Haeger signs the lease agreement approving Drury Hotels as the builder of the hotel that will be part of the university's conference center complex on NAU's north campus. (Photo by Jerry Foreman)

Drury signs contract with NAU
to build 150-room hotel on campus

Northern Arizona University signed a lease agreement today with Drury Hotels to build a 150-room hotel as part of a conference center complex planned for the northernmost point of the Flagstaff campus near Butler Avenue and Milton Road.

The overall project will include about a 37,000-square-foot conference center, which is a joint partnership with the city of Flagstaff, and an adjoining parking garage. NAU will be responsible for construction of the $15 million conference center and garage.

The project is expected to break ground by Sept. 1.

"This is an important step forward for Northern Arizona University and the city of Flagstaff," said NAU President John Haeger. "The project allows our institution to hold regional conferences on campus and provides opportunities for further development of our School of Hotel and Restaurant Management. It also will serve as an economic engine for northern Arizona."

Missouri-based Drury is a family-owned company with 117 Drury Inns, Drury Inns & Suites and Pear Tree Inns in 17 states, mostly in the Midwest and South. The family-owned chain was recently ranked the No. 1 overall hotel brand by the Market Metrix Hospitality Index, the nation's largest and most in-depth measure of hotel, car rental and airline performance.

Drury has entered into partnerships with city governments in the past, but this is the first with a university, according to Dennis Vollink, president of Drury Southwest.

"Flagstaff is a growing, vibrant community," Vollink said. "We saw great potential with the university and conference center." This is Drury's first Arizona venture, but he added that his company is examining the possibility of expanding into the Phoenix area.

The agreement provides for a 30-year ground lease with two 10-year renewal options for the hotel. NAU will receive a percentage of the hotel's annual gross revenue for rent above an annual base rent of $60,000.

Vollink said the hotel and conference center complex represents a long-term partnership with NAU and the city as well as the School of Hotel and Restaurant Management. "Our successes are tied back and forth to each other," he said.

Flagstaff Mayor Joe Donaldson said the city is pleased to see the community project moving forward. "The conference center, through the partnership of NAU and the city, will have significant positive impacts on education, tourism and economic development throughout the greater Flagstaff area," he said.

The Flagstaff City Council already has approved an intergovernmental agreement that sends $2 million toward the conference center. The Arizona Board of Regents has approved the initiative.

The agreement also stipulates that Drury will make annual payments to Coconino County in lieu of property taxes, which would otherwise not be required because NAU is a state institution. Drury also will pay all other applicable state and city taxes.