Assured by a report that Streetsboro is maxed out on hotels, motels and car washes, Mayor Glenn Broska on Oct. 23 said city leaders are drafting legislation to manage future development.
What their draft will propose is still unknown, and city council members have strong opinions about whether or how much to intervene in the market.
Streetsboro City Council imposed a temporary moratorium on new car washes, hotels and motels last January and hired a planning firm, Urban Decision Group, to determine if there really is a glut of such businesses in the city.
Streetsboro is currently home to nine hotels, including one that is temporarily closed for renovations. The city also has four car washes, and a fifth that was approved prior to the moratorium is expected to open in the next year or so.
Rick Stein, head of Urban Decision Group, detailed his company’s findings to city council’s service committee on Monday. His conclusions? There is such a thing as too many car washes, and the local hotel industry has not yet reached the end of its downward spiral.
The report gives council the information it needs to intelligently move forward, Broska said, noting that city leaders must concentrate on what is best for Streetsboro long term.
Council Member Justin Ring voiced his opposition to city leaders trying to step in and correct the free market.
“The markets will always correct themselves at one point or another,” he said.
Ring also rejected zoning resolutions as an answer, saying a better option is to discourage residential hotels.
As the market corrects itself, Streetsboro will find itself with some nonviable car washes and hotels, Broska cautioned.
“You’ll start to get into a price war,” he predicted. “As they reduce the prices to stay overnight, they are most likely to reduce the services there. You are not going to attract the travelers; you’re going to attract people that are going to be residents.”
Those sorts of hotels are more likely to bring crime and drugs into the city and will stress Streetsboro’s first responders who “are already strapped enough,” Broska said. He said Streetsboro already has a couple hotels on that spectrum.
“I don’t want to see other hotels become competitive for the bottom. I want them to become competitive for the top,” Broska said.
Keeping hotel prices competitive without reaching that bottom point is a way city leaders can continue to serve the 6.5 million people coming off the turnpike every year, Broska said.
City residents should not be paying for out-of-towners who engage in activities that are unwanted in Streetsboro, Council Member Julie Field said. Instead, the city could enact legislation that would benefit the city as a whole, she said.
City Economic Development Director Patrick O’Malia said he hopes council will seriously consider Urban Decision Group’s findings. Having so many hotels and motels made sense in the tourist era, he said.
“We don’t have that anymore. A lot of them are kind of scrambling to survive. The city must adapt at this point,” he said.
Council Member Anthony Lombardo said developers could be cashing in on construction projects that may result in empty buildings, but highlighted O’Malia’s ability to fill buildings.
“I think we’re going to have to make some important decisions on how to move the city forward. We don’t want to be oversaturated, but we also want to make sure that we’re not turning down businesses if the area is zoned for it, either. We want to make sure everyone has an equal opportunity,” Lomabardo said prior to Stein’s presentation.
Not wanting to limit business opportunities, Council Member Jon Hannan said if someone feels they can make a business work, it’s a free market. At the same time, though, an oversaturated market could leave developers with money in their pockets, operators with failed businesses, and Streetsboro with empty buildings, he said.
Hannan stopped short of suggesting a permanent ban on hotels, motels and car washes, but said city leaders could at least temporarily alter the zoning code to prohibit such installations along Route 14.
“We want something that’s going to be able to be sustained. When those businesses go out, they just sit there because there’s not a use for them,” he said.
What’s in the report
In a report dated June 2023, Urban Decision Group noted that demand for hotel rooms plummeted after SeaWorld closed locally in 2000 and Geauga Lake shuttered its theme park in 2007.
Looking at Streetsboro’s eight currently operating hotels, the research firm noted that the city’s hotels provide 679 rooms, not including the 84-room Wingate by Wyndham, which is temporarily closed for renovations.
Demand for hotel rooms is currently driven by turnpike travelers needing a night’s rest, workers in town for corporate events or trade shows, and people in town for weddings and large events like Twinsburg’s annual Twins Days.
Streetsboro’s two extended-stay and budget hotels further serve populations like temporarily displaced individuals and families, and construction and industrial workers in town for temporary jobs.
Demand for hotel rooms is rebounding post-pandemic, but “virtually every data point we examined … indicates that this market is still searching for a point of equilibrium, i.e. the market has not yet reached the bottom,” the researchers found.
There is good news. Streetsboro’s easy access to the Ohio Turnpike and I-480 still makes the city “a logical choice for families spending one or more nights in the area,” the report states.
Urban Decision Group identified today’s inflationary economy as the prime culprit, stating that consumers have less discretionary income and funds for staples, housing and transportation.
“If past is prologue, this is likely to be reflected in the reduction of discretionary spending by U.S. consumers in sectors such as leisure and related travel over at least the next five years,” the report states.
Inflation is fueling increased revenues in the hotel industry, but that doesn’t mean conditions are improving, the researchers found, noting that revenues generated by the rooms are the lowest they have ever been when adjusted for inflation.
Focusing on the city’s four car wash businesses (a fifth, approved prior to the moratorium, is expected to open in the next year or so), the researchers found that Streetsboro is more likely to be overserved than any other Portage County community.
But thanks to out-of-town customers using Streetsboro’s car washes, as of June 2023, the car wash market appeared to be “remarkably balanced,” the researchers found.
However, local and commuter traffic is unlikely to be able to support five car washes “unless Streetsboro and surrounding environs experience a significant growth in households over the next five years and/or consumers are induced to spend more of their discretionary income on car washes,” the report concluded.
The researchers’ final word? “We question whether or not the consumer expenditure pie is big enough to satisfy all the existing and planned businesses in this industry.”
Wendy DiAlesandro is a former Record Publishing Co. reporter and contributing writer for The Portager.