By Kaylee Lindenmuth
Construction on a hotel project backed by the KU Foundation is progressing, despite weather-related setbacks, and is expected to be completed by the end of the summer.
The $15 million, 100-room Hampton Inn and Suites hotel project is “an investment in our endowment,” said KUF Chief Financial Officer Ed Richmond.
“Once the hotel is up and running and starts to generate profits, those profits will come back to the foundation in the form of dividends on the endowment,” added Richmond. “The other way that it’ll make money is, when the hotel is operating, its value will be significantly greater than the cost to construct it.”
Richmond noted that the foundation’s sole purpose is to raise private support for KU and its students and manage a $30 million endowment.
“One of our objectives is to grow the endowment both through new gifts and through investing it,” said Richmond. “We’re always looking for higher rates of return on our investments and looking to diversify our investments so we don’t have ourselves completely exposed to the risks of the stock market.”
Richmond said the idea came from discussions between the foundation’s investment committee and real estate committee in 2015, and in 2016, feasibility studies were conducted.
“After about two years of study, the project that came to the forefront was for a hotel,” said Richmond. “We had been hearing for years and years from alumni who come back, from parents, from visitors: ‘There’s no place to stay in Kutztown.’”
Richmond noted that the hotel is seen as an investment in the regional community as well as the university.
“People that are going to visit KU, East Penn Manufacturing, the festivals… they’re going to come here no matter what,” said Richmond. “The problem is, now when they come here, they’re staying in these outlying areas, Allentown and Reading, and they’re spending their money there, and we want them spending their money here in Kutztown.”
In addition to providing lodging in the Kutztown area and income for the Foundation, Richmond added the hotel could also be a source of employment for students.
Richmond added that the project is expected to be completed in late July or early August, following setbacks related to rainy weather in 2018.