Connecticut in general has long been a popular destination for the well to do and it is easy to see why. With its beautiful scenery, ample cultural amenities and strong economy, it’s no wonder that people with money tend to flock here. But what exactly makes a Connecticut resort so appealing? Luxury Hotel Advisors did some research and found some pretty compelling reasons to have a resort in Connecticut!
Climate and Geography
By New England standards the climate is pretty mild. On average, there are only 12 days a year when the temperature goes above 90 degrees and about six days when it falls to zero or below. This makes it a great place for people that want to experience all four seasons. There is also an amazing diversity of terrain from the beaches on Long Island Sound to the rolling hills in Litchfield County. The scenery is nothing short of stunning almost all year.
Tax Incentives
The state does offer some tax incentives that are a draw for the affluent. For individuals, there is no state income tax and for businesses there are Opportunity Zones along specific corridors. And if your project is not in an Opportunity Zone you can still look at being a Tier 6 project.
To be considered a Tier 6 project, the development must meet certain investment and job creation requirements. Specifically, for a non-retail business investment the project must involve an investment of at least $10 million and the creation of at least 75 new jobs, or an investment of at least $100 million and the creation of at least 50 new jobs.
Non-retail businesses can include a wide range of industries, including a hotel development. The tax exemption for Tier 6 projects can be substantial, with the property owner being exempt from paying property taxes for a period of up to seven years.
Education and Culture
Connecticut is home to some of the country’s best colleges and universities, including Yale University, Quinnipiac University and Trinity College. Plus, many people do not realize that the area around Washington, CT is home to 12 of the best private boarding schools in the country.
Connecticut has a rich cultural history that dates back centuries. Many museums showcase this history through exhibits on everything from colonial life to contemporary art pieces by local artists. There are also many festivals throughout the year where visitors can enjoy local food and entertainment while learning about the rich history of the area.
Our Favorite Town – Washington,CT
We think the town of Washington in Litchfield County, may be one of the most picturesque towns in Connecticut. It has New England charm in abundance, stunning landscapes and a rich cultural heritage. With a population of just over 3,000 residents, Washington has remained relatively unchanged over the years, preserving its historic buildings and natural beauty.
Developing a Resort in Washington
Investing in a resort hotel development project in Washington, CT is a smart idea for the right developer. If you can get the permits, you won’t have much in the way of new competition. Another benefit is the town’s proximity to major urban centers. Washington is only 85 miles from New York and 140 miles from Boston, making it a perfect weekend getaway destination for urbanites. This provides a steady stream of potential customers for any new hotel in Washington, CT.
One of the most unique aspects is the presence of a dozen private boarding schools within a 30-mile radius of Washington. They enroll over 3,800 students each year with parents spending over $50,000 per student annually on education. A new luxury hotel would have access to parents, family members, and prospective students, who need accommodations when visiting the schools. The opportunity to access this community is rare and it is definitely underserved with the existing hotels.
Commercial Real Estate Trends
According to recent data, the commercial real estate value in the Washington CT area has been steadily increasing over the past few years. In 2020, the median sale price for commercial properties in the area was $1,725,000, a 16.5% increase from the previous year. The average price per square foot for commercial properties in the area was $215, an increase of 7.5% from the previous year.
Barriers to Entry for a Connecticut Resort Project
One of the biggest barriers to entry for new hotel development in Washington CT is the permitting and entitlement process. Developers must go through a lengthy process of obtaining permits and entitlements from the local government, a process that is time-consuming and expensive and often takes years to complete. In addition, due to land preservation requirements, there is limited land available for new development projects, making it difficult for developers to find suitable locations for a hotel project.
In Conclusion
Our conclusion is that this is a great market for a luxury hotel development. The ideal scenario would be a fully permitted and entitled property that has the support of the local community and the local government. If you are looking to expand your portfolio in New England, Luxury Hotel Advisors may have just the right Connecticut resort opportunity for you! Keep in mind that LHA can act as your hotel real estate broker or as a hotel development advisor.