A1 Hospitality isn’t quite finished   celebrating the opening of its newest Tri-City hotel, the Courtyard by Marriott in Pasco.

The 99-room hotel opened Feb. 18 at the entrance to the Tri-Cities Airport. The $10 million hotel employs more than 30 and combines the amenities of an upscale property—fitness center, pool, bar and restaurant, plush rooms—with striking views of the airport and runway.

Taran Patel, who leads A1 with his father, Vijay, said there will be a grand opening as well as effort to promote the Bistro restaurant to area residents once hotel is out of the shakedown period.

You only get one chance to make a first impression, he noted.

“We think we can be a really cool place,” he said.

With the Courtyard project largely complete, the Patels are turning their attention to a far more complicated undertaking—a mixed use development at the Three Rivers Convention Center in the heart of Kennewick.

In September, A1 signed an $85 million development agreement with the city of Kennewick that allows it to develop a four-star hotel, retail space, residences and eventually offices at the city-owned convention center complex.

It calls its proposed development “The District at Vista.”

The name is a nod to neighboring Vista Field, where the Port of Kennewick is laying the groundwork to develop the 103-acre former municipal air field into a mixed-use village. Infrastructure and roads are being built and the first 20 acres will be available to developers this year.

At Vista Field and Three Rivers, the Patels spy an opportunity to do something special. And the city of Kennewick spied a partner to help it expand the convention center after taxpayers repeatedly declined to raise the sales tax to pay for an expansion

The city will expand the convention center within its existing resources while A1 Pearl will built a hotel connected to the new addition. The initial phase includes a three-story retail center.

Future phases will add 800 residential units and 200,000 square feet of commercial space for stores and businesses to Three Rivers.

Central Kennewick is ready for the urban stylings of Vista Field and The District, Patel said.

Targeting foreign investors

While the port is making progress on its airfield transformation, The District at Vista is still several years from breaking ground. Patel said the company is developing marketing materials to help woo foreign investors to the plan.

It has posted renderings of what the project might look like. It hasn’t pitched the idea to prospective investors.

A1 has unusual-for-the-Tri-Cities plans for financing.

The District at Vista is set to be a rare local development financed through the government’s EB-5 immigrant investor program.

EB-5, for Employment-Based Immigration, Fifth Preference, is administered by the U.S. Customs and Immigration Service.

 It awards green cards to foreign investors and their families for investing in projects that create jobs in the U.S. Most projects are sited in what’s called targeted employment areas.

The Lodge at Columbia Point in Richland leveraged the EB-5 program to raise $2 million of the $14.8 million construction cost in 2017.

The minimum investment for projects in areas such as Three Rivers was $500,000 when the Patels registered it last year. The buy-in price is now $900,000, with future increases tied to inflation.

Immigrant investors placed a little more than $1 billion in Washington state between 2010-15 and supported nearly 18,000 jobs, according to IIUSA, a nonprofit trade association that advocates for policies that enable EB-5 investing.

Hotels are a popular target for EB-5 investors. In Washington, most EB-5 projects are concentrated on the Interstate 5 corridor.

State of the industry

Courtyard by Marriott is one of three hotels to open in the Tri-Cities this year.  Comfort Suites Kennewick Southridge begins accepting guests on March 30, according to the parent brand’s website.

WoodSprings Suites, a 122-room extended stay hotel under construction at 1370 Tapteal Drive in Richland near Columbia Center, is accepting reservations starting in June. And the owners of the Red Lion Columbia Center in Kennewick plan yet another project—a residence inn near the Red Lion and mall.

The new additions will collectively push the Tri-City hotel inventory to about 4,700 rooms, according to Visit Tri-Cities figures.

Patel credits strong demand and favorable interest rates for the high level of activity and a space of remodels that upgraded aging properties such as the former Richland Shilo Inn.

Patel said population demand and not a shortage of rooms is behind the investment.

That’s based on stable hotel revenue and occupancy, as measured by a metric called revenue per available room or RevPAR.

Tri-City hotels reported $58.12 in RevPAR in 2019, an increase of 3.5 percent over 2018.

Patel said local RevPAR rates are tracking with national trends, a key sign the market is in balance. Rising revenue would be good for hotel operators in the short term, but they create an affordability challenge than can drive away convention and meeting business in the long run.

“We are at equilibrium,” he said.