KALAMA — In a big step for the McMenamins project, Port of Kalama commissioners Wednesday approved an amended lease with the hospitality company and awarded a $6.8 million contract to JH Kelly to build the shell of its restaurant and hotel.
The Longview-based contractor is expected to start construction of the above-ground work within 60 days, according to the port. The groundwork already is complete.
The project had stalled briefly after estimated construction costs were higher than anticipated, forcing the port and McMenamins back to the bargaining table on a portion of the lease that set a cap on construction costs.
Under the lease, the port will hire Kelly to build the shell of the hotel. McMenamins will spend an estimated $3 million on the final touches and design. Between the port’s and the company’s initial investments, the final price tag could be between $9 million to $10 million.
While the port will pay up front for the building shell, McMenamins will gradually pay the port back over time through its lease. As result of the recent lease negotiations, the port has agreed not to raise McMenamins’ rent. Instead the port essentially will wait longer to recover its costs.
Originally the port had hoped it would take 12.5 years to recover construction costs through the lease, Wilson said. Now it will take about 14 years, although that number could change depending on the final price tag of the project, he said.
With taxes added, JH Kelly’s contract will cost the port about $7.3 million.
Commissioners Wednesday were eager to see the project through after years of on-and-off talks with the Northwest hotel and restaurant chain.
Troy Stariha, Port of Kalama commission president, said a couple extra years to recover costs on construction would be well worth the wait.
“The benefits of the project outweigh the added time,” Stariha said.
The hotel will create about 75 to 100 jobs and will be a significant new source of sales-tax revenue for the city of Kalama.
He said he was pleased to award the project to a local contractor.
“It’s nice to have a local company, local people. They feel like they kind of own a piece of that when you build a project like that in our area. So I appreciate that they’re willing to price it in the market that gets them a bid and gets local jobs,” he said.
The hotel, restaurant and brewing company has many locations in the Northwest. It’s known for remodeling historic buildings into destination hotels, such as the Crystal Hotel and the Kennedy School in Portland. But McMenamins has new facilities, too, such as a waterfront restaurant in Vancouver.
The three-story, 30,000-square-foot Kalama hotel will have just 40 rooms. The first floor will have a brewery, restaurant/pub and bottle shop as well as meeting/banquet space. The hotel will be about the size of the new port administration building, minus the interpretive space, according to port staff.
The building will be modeled after an early-1900s Hawaiian inn, with tropical and native touches blending with elements of Kalama’s history.
