Coming soon: hotel planned at Ely Community Center

Keith Vandervort

ELY – The historic community center building here is set to become a 28-room boutique hotel following a city council vote this week to accept a purchase agreement and business plan from a developer and approve an order authorizing the sale of the monument.
Matt Stupnik, of Dellwood, Minnesota, has accepted the $2 purchase price for the building and has three years to complete his plan to transform the former community center into a boutique hotel “to serve travelers seeking a year-round stay – a way that would complement their backcountry, bicycling, shopping and business experience.
City attorney Kelly Klun said Stupnik had worked with city officials over the past year to develop his plan. Following a public hearing on Tuesday evening and the second reading of the land sale ordinance, council members voted to authorize the sale. “We intend to complete the transaction within the next week,” Klun said.
No one attended the public hearing. Klun provided details of Stupnik’s plan that had not previously been made public.
The retail area on the main level would contain a wine and beer bar, kitchen, lobby with espresso bar, and hotel rooms. The auditorium stage would be updated for performances and serve as a small event space.
The business plan also describes that half of the auditorium would be converted into one or two bedroom units. Also, atrium-style windows/skylights near the stage would provide much-needed light. The units would have access to the roof through a functional skylight on the roof, in addition to a screening room converted into a penthouse with access to the roof.
“As the building is on the National Historic Register, certain parts of the building would certainly be preserved in their natural character,” Klun said. All hallways in common areas would be maintained, from travertine marble to terrazzo floors. In addition, the moose mural would be preserved.
According to Stupnik’s plan, the basement of the century-old building would be converted into a retreat-style spa center with mineral baths, a steam room and a sauna, with the potential for additional services as the business expands.
“Employment-wise, he would employ eight to 10 people to run the business when it’s fully operational,” Klun said. “He expects to pay up to 12,000 hours of construction labor, or about $1.5-2 million, over the course of the project.”
The current schedule for the construction plan would be three years, beginning in January 2023. The project will be completed in accordance with the National Park Service (NPS) Book of Standards for Renovation and Adaptive Reuse. The Stupnik Community Center Renovation Plan was recently approved by the Minnesota State Office of Historic Preservation, “and now awaits full approval and certificate of award from the NPS.” The certificate is expected this fall and the three-year construction project would begin in 2023.
“If he does not complete the reconstruction of the building within three years, or make significant progress, as determined by the council, the council may take over the building,” Klun explained. “There is a right of re-entry which is attached to the purchase. Although it pays a very nominal purchase price of $2, we understand that the construction project (cost) is significant and if not followed through, the council can repossess the building.
She continued, “Ideally, we want this to succeed, of course. I think he presented a fairly detailed plan. He worked with architects. He has completed several projects. His experience is in solar construction, so he has a background in construction.
Mayor Roger Skraba said he was impressed with the construction plan. “Some of us have seen some of the working drawings, and the stage is one of the areas of the building that should stay natural. It’s a pretty big and large area,” he said. “Our community may not be able to use the CC like we used to, there might still be some usage. I’m optimistic.”
Skraba added: “Our biggest concern is parking. We pretty much expressed to (Stupnik) that under clear conditions, if it’s not there, there will be no occupancy certificate issued. It must have at least a minimum of 26 or 28 parking spaces. In three years, there will be at least 26 or 28 parking spaces.
Klun reiterated that in the purchase agreement, a list of “steps” to go through addresses the issue of parking. “Within three years, the purchaser will have to secure and arrange the necessary parking within the scope of the project, as determined by the City.
Further, “When project requirements have been sufficiently identified, the purchaser shall prepare and periodically, at least twice a year, update the project schedule for city review. The project must identify the elements that affect the timely completion of the project.
Skraba said city officials expect construction labor costs to be as high as $2 million. “Material costs will likely be even, so we estimate it could cost him up to $4 million,” he said. “And $5 million isn’t far. Its financing is based on a portion of the value of the building. There is a window closing for him by the end of the year for him to have the opportunity to request matching dollars.
Skraba expressed his enthusiasm for the project and the developer. “He was very upfront and honest about everything. I feel comfortable working with him. He’s in the business,” he said. “The trend is to renovate old buildings, rather than demolish them. It is a unique opportunity. Hopefully the building will be saved and reused. We don’t want to have to take it back and start all over again. We want this project to succeed. »
Before voting on the ordinance at the regular council meeting. Council Member Al Forsman said, “It’s exciting that something valuable to our community is being offered here. It is an important investment in our community that is put forward. This will generate dollars, both in jobs, improving property and taxes.
Council members voted 5-0 to approve the community center sale order. A council member, Heidi Omerza, was absent from the meeting. Council member Angela Campbell abstained from voting on the measure.

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