Canad Inns complex approaches completion

2006 saw the long-awaited groundbreaking of Grand Forks' Canad Inns entertainment complex, a project more than three years in the making.

The $50 million project that city leaders hope will give a boost to the city-owned Alerus Center next door is a few months from completion.

City administrator Rick Duquette, the city's liaison with Canad, said that the hotel is on track for an opening sometime in April.

Altogether, the project represents one of the most significant additions in years to the area's hospitality industry, boasting a 190-room hotel, an indoor water park and several Canad-brand restaurants and bars. The company has promised another entertainment facility next door but has had trouble finding an interested partner.

These amenities, city leaders such as Mayor Mike Brown and City Council President Hal Gershman believe, should make it easier for the Alerus Center to attract major conventions, boosting the area's tourism economy.

Besides that, once its tax abatements expire, it could pay more than $700,000 a year in property taxes. City leaders think that makes it worth the incentives the city is giving the Winnipeg-based firm.

Big splash

Because the Canad project is so big, its impact to the community is expected to be wide ranging.

With a 40,000-square-foot water park, it would offer one of the largest such facilities in the Red River Valley region. Only the Seven Clans Casino and hotel near Thief River Falls has a comparable water park. But while that entertainment complex offers slot machines, it doesn't offer other amenities, such as shopping and dining, that Grand Forks does. And Seven Clans is not located near a major highway.

There's a bigger competition that the Canad water park could impact, however, and that's the one between Grand Forks and Fargo for Canadian visitors. The water park would be one amenity for which Fargo, with bigger shopping malls and more restaurants, has no equivalent.

Here in town, Canad would compete with existing hotels, as some hotel owners complained when the city was negotiating a deal with Canad. City leaders said at the time the new hotel would attract more visitors to town and help all other hotels.

Plenty of rooms

Both sides will get to see how that plays out this year.

With 190 rooms, Canad will be the largest hotel in the area, beating out the next biggest, Holiday Inn, by 40 rooms. Canad, in fact, will represent nearly one-tenth of all rooms available in the community.

And, being next to the Alerus Center, its advantage in hosting conventions, at least in terms of capacity, will be unrivaled. The center boasts a capacity of 21,000, though that includes the arena as well as the convention center. The convention center alone can accommodate more than 1,500 in a classroom setting. The next biggest rival, the Ramada Inn and Conference Center, has a capacity of 750.

With all that investment going into the Alerus Center location, many city leaders and business owners believe the 42nd Street corridor could become the next big commercial strip in town. That remains to be seen, though, as there have not been major developments in that direction.

A turbulent past

The history of the project stretches back to the summer of 2000, when Ledohowski, answering the city's quest for a Canad hotel attached to the Alerus Center, called for a 193-room hotel tower, with no mention of a water park. The city rejected that proposal because it called for $2 million in loans, a $200,000 grant each year for marketing, an all-but-free land lease and the maximum allowable tax abatement.

At the time, Grand Forks was still recovering from the disastrous flood of 1997, which may have made it a riskier investment requiring more public subsidies.

By 2002, the city had recovered and Ledohowski returned, proposing essentially the same hotel. But this time, the company did not ask for millions. It asked only for the land and $300,000 a year for marketing the entire community, not just Canad alone.

What really sealed the deal, sources said at the time, was the city and Park District saying they wanted to build a public water park next door.

Over the next year, the water park proposal gradually fell apart as the public rejected the idea of adding a 1¼-cent sales tax to pay for it, even though a lot of the money would go toward property tax relief.

The last push

Instead of giving up, Ledohowski went back to the drawing board and announced in early 2004 that Canad would build the water park and add a movie theater to the mix.

The city approved a deal a few months later, calling for a cheap lease, a $1.5 million marketing fund and a five-year tax abatement. The deal was worth about $7.2 million altogether.

But then it was Canad's turn to run into trouble. Financing proved challenging enough that the company repeatedly delayed construction plans despite various publicly announced schedules.

By December 2005, though, construction crews had begun preparing the ground for the hotel, mostly moving water and sewer lines around. Construction in earnest began early the next year, though an official ground breaking wasn't held until March. By October, the hotel tower had reached its full height of 13 stories.

Reach Tran at (701) 780-1248 or ttran@gfherald.com or see his blog at www.areavoices.com/gfhcitybeat .