Stephen F. Austin State University

NACOGDOCHES, TEXAS-The Fredonia Hotel and Convention Center soon could provide Stephen F. Austin State University hospitality students expanded learning opportunities, and local citizens and visitors enhanced dining, meeting and lodging facilities, following action by the Nacogdoches City Commission.

City commissioners voted Tuesday to forgive $2.5 million in debt owed by the hotel's owner, the Fredonia Corp. The money came to the city by way of the federal government and the state for economic development and employment-generating activities. The city loaned the money to the Fredonia for construction of the convention center and renovations to the hotel in about 1989. Prior to that, the facility had been out of operation for sometime.

"Indeed, it did result in increased employment opportunities for the citizens of Nacogdoches, " said Dr. Jerry Holbert, vice president for university advancement at SFA. "The crux of the matter, however, is that hotel operations have never been able to repay any of that loan to the city and are not going to be able to do so in the future."

The hotel was built in the 1950s by a committed group of farsighted citizens who understood the economic necessity of such a facility in downtown Nacogdoches, Holbert said.

"Some dramatic change has to take place in the mission and operation of the hotel for this essential facility for Nacogdoches and SFA to be a viable operation," he said.

That's where the university comes in. The SFA Real Estate Foundation, a nonprofit 503C organization separate from the university, is in discussions with the Fredonia Corp. about the hotel's future mission and management. Holbert, executive director of the Real Estate Foundation, said the foundation was established specifically to receive gifts of real estate and keep property investments separate from cash endowments of the SFASU Foundation. The role of the Real Estate Foundation, which now owns the downtown art center and 1,400 acres of pine trees, since has evolved into property ownership and management, he said.

Holbert and the SFA hospitality management program also are negotiating with firms that have experience in operating university-affiliated hotels to possibly manage the Fredonia.

One of those is Aramark Harrison Lodging. Aramark is SFA's food provider, and Harrison Lodging operates conference centers and hotels, 18 on college campuses. These include the Carolina Inn at the University of North Carolina at Chapel Hill.

Not only are such firms experts in hotel management, it's not unusual for them to undertake major remodeling as part of a management agreement, Holbert said. Such an agreement also might provide for aligning the property with a national hotel brand. Among advantages would be a centralized reservation system.

Dr. Lynda Martin, chair of the Department of Human Sciences at SFA, projects that a partnership with a management firm could double or even triple the number of students-currently 113-enrolled in hospitality management. Students in other disciplines such as retail management and interior design also could potentially benefit, she said.

"A state-of-the-art facility could provide students with opportunities to learn hands-on the importance of excellent customer service in a quality environment," she said. "This opportunity would put SFA in a class with only about 20 schools nationwide that have their own hotel affiliated with a hospitality program."

Four faculty members teach in SFA's program: Martin, who has many years' hospitality industry experience; Dr. Carl Pfaffenberg, who has a strong lodging background; Dr. Sherry Wittenbach, a registered dietitian experienced in food service and well-versed in both food service and lodging curriculums; and Chay Runnels, who is experienced in tourism, event and meeting planning and helped develop the Texas Forest Trail Region, a program that received the Preserve America Presidential Award for heritage tourism.

"These faculty always have worked closely with the Nacogdoches community to extend the theoretical aspects of the vast hospitality industry into practical application," Martin said. "Having an opportunity to provide students with a facility to practice their theory would serve to enhance the students' marketability and greatly enhance their critical-thinking, customer-service and problem-solving skills."

Pam Fitch, executive director of the Nacogdoches Convention and Visitors Bureau, said the hotel and convention center is an essential part of the city's convention and tourism industry.

"It allows us to attract regional, state and national meetings to Nacogdoches, providing an important economic boost to our local economy," she said.

Nacogdoches City Manager Jim Jeffers said the loan to the Fredonia Corp. came from two separate sources: $1.3 million from the U.S. Department of Housing and Urban Development and $1.2 million from the city's revolving loan fund, which is "recaptured federal dollars" that the city loans out again after borrowers have repaid a loan.

"None of this is local tax dollars," Jeffers said.

HUD OK'd forgiving the $1.3 million, and Texas' Office of Rural Community Affairs approved the city's forgiving the $1.2 million. The $1.3 million would be forgiven outright. Although the $1.2 million also would be forgiven, the city would have to repay that amount. The city actually will repay itself by transferring $100,000 annually from general and enterprise funds over 12 years into a fund earmarked for economic development, Jeffers said.