GALLOWAY TOWNSHIP - The Richard Stockton College of New Jersey closed Wednesday on its purchase of Seaview - A Dolce Resort, paying $20 million for the century-old hotel and golf course off Route 9 in the Smithville section.
The issue of how much the college might pay the township to make up for the loss of Seaview property tax revenues remains unsettled.
Meanwhile, Stockton and Dolce management will work on nailing down the ShopRite LPGA Classic's return in 2011. A Classic official called the Stockton purchase of Seaview a positive development but said negotiations will determine if the event stays at the course over the next few years.
As a nonprofit, Stockton does not have to pay property taxes, but it could choose to make payments in lieu of taxes. The payments could reflect the full or partial amount that would have been paid by Seaview, the township's largest commercial ratable. College and local elected officials intend to meet next week to discuss details, said Matt Altier, Stockton's vice president of administration and finance.
In 2009, the municipal government received $117,473 in taxes from Seaview. The property paid $481,752 in total health, school, county, open-space, library and municipal taxes, township manager Roger Tees said.
"What I'm looking for is for our residents to be unaffected financially," Galloway's Deputy Mayor Don Purdy said. "So I'm going in for what we were getting previously."
Altier declined comment on whether payments would equal what the township would receive from a nonexempt taxpayer.
"We've said all along we're going to make a contribution. We will negotiate something that's extremely fair, and they will be very happy," Altier said.
The Seaview price tag of $20 million was $9 million less than Seaview's assessed value. It amounted to less than half of what it cost Stockton to build its most recent, 380-unit on-campus housing project, Altier said.
Eventually, an undetermined number of hotel rooms will be converted to housing for students enrolled in the college's Hospitality and Tourism Management program. College officials have said as many as 380 students could live there, with many doubling up in rooms.
The college intends to limit the students eligible to live there to honors, graduate and veteran students, groups typically more mature and unlikely to create the raucous atmosphere some neighbors feared would result when the deal first went public.
"We have groups of students that will be ideal. We're not going to be putting freshmen there," Altier said.
Seaview General Manager Stephen Prakash said students would have access to the facility's amenities only during working hours. College officials have said some rooms will always be kept available for resort clients.
Prakash expects students to stimulate the environment at the resort and provide an employee recruitment pool. Although they will reduce the number of seasonal hires, their presence will not affect the year-round workforce, he said.
"We were very excited to hear their plans," Prakash said. "They seem to be very excited about the property, and getting our help and input to grow the program."
The college has long wanted to build its own conference center, but construction estimates were cost-prohibitive. Altier said Seaview would be marketed as a premier academic conference site.
Meanwhile, the resort had consistently fallen short of previous owner LaSalle Hotel Properties' financial expectations. LaSalle tried remedying that by replacing long-time manager Marriott International with Dolce. But the switch was no match for the difficulties presented by the economy.
LaSalle paid $50 million in 1998 for the resort, and invested another $27 million in the property. LaSalle was trying to sell Seaview when Stockton officials contacted the company. LaSalle eventually chose the college from among several offers, Altier said.
Stockton's Board of Trustees approved the Seaview purchase a month ago. At the time, college President Herman Saatkamp said the deal could establish a corridor with a "college-town" feel along the five miles of Jimmie Leeds Road between the resort and main campus. He also said the college hopes to expand, projecting that enrollment could increase from about 7,000 undergraduate students to 10,000 students during the next decade.
During the upcoming months, college officials will hire a design architect to guide them on intended resort upgrades tentatively expected to cost between $5 million and $10 million. The work will not change the appearance of the historic hotel, but improve it and catch up on deferred maintenance, Altier said.
"Many owners have to be very careful about return on investment. I think Stockton is definitely having a longer-term view," Prakash said. "The property's in good shape today. But clearly there are things we'd like to do that Stockton, it looks like, is very open to discussing."
The partnership with the college also likely will drive more business to the hotel in the way of educational and academic seminars, Prakash said.
"Whereas in the past we might have been just another location people would have considered, I think now that we're being affiliated with this institution of learning, people will be more likely to (choose) us," he said.
Prakash and Stockton representatives also are tasked with finalizing the return of the ShopRite LPGA Classic. The event is expected to be held at Seaview for the next four years, but the contract must be negotiated each year.
The event, which brings the world's best women golfers to Seaview, is the resort's highest-profile event. The nationally televised event drew big crowds when it was held this past June.
Classic executive director Tim Erensen said Wednesday he viewed Stockton's purchase of Seaview as a positive. There is no guarantee the tournament will be held at Seaview in 2011, but Erensen said he looks forward to having conversations with Stockton officials about keeping the event at Seaview long-term.
"We continue to do our due diligence in the market place," he said, "and are having ongoing conversations with representatives from Seaview regarding the 2011 event and beyond."
Erensen said an announcement about where the 2011 Classic should come in the next 30 to 60 days.
Staff writer Michael McGarry contributed to this report.
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