MARSHALL – The subject of hotel development is a complicated one in Marshall, Cal Brink said. In recent years, there have been proposals to build new hotels in town – including one proposal near the new Red Baron Arena and Expo – that didn’t come to fruition. And local hotel owners have long maintained that Marshall can’t support more hotels.

At this point, Brink said, it might be helpful to bring in an outside perspective.

Brink, the director of the area Economic Development Authority, came before the Marshall City Council on Tuesday with a proposal to hire a firm to study the city’s future hotel market. The study would be similar to the housing capacity studies Marshall has conducted in the past, he said.

Brink said the EDA had been approached by a Texas-based investment company called Gatehouse Capital, which develops combined hotel/conference center projects. For $20,000, Gatehouse would conduct a market study for hotels in the Marshall area. Depending on the results of the study, the project could then proceed to pre-development or development for a new hotel project, he said. Brink said Springsted Inc., the city of Marshall’s financial adviser, would also do a due diligence analysis on Gatehouse Capital.

Brink said the $20,000 for the market study would come from EDA funds. If the city decides not to move forward with the development project, it could still keep the results of the study, he said.

Brink said a feasibility study for new hotels was something the EDA had been considering. The information could help clarify what the community can support in terms of hotel business, or even help existing hotels develop their business, he said.

Council members voted to authorize the hotel study. The vote was 6-1, with council member Glenn Bayerkohler casting the vote against.

Several items of business at Tuesday’s council meeting were related to the Red Baron Arena and Expo, and some council members voiced concerns about a few. Some council members said they would not be voting to approve sponsorship agreements for the arena/expo, including agreements with Ace Hardware of Marshall, Viking Coca-Cola and D&G Excavating.

As Marshall Convention and Visitors Bureau Director Darin Rahm went over the agreements with the council, Bayerkohler said he had concerns about the value of advertising the businesses would receive, compared to what the city was being paid in sponsorship fees. For example, Bayerkohler said, the Ace Hardware agreement had a $5,000 value in signage, logo rights and digital media for three years, but the city would receive only $3,000 a year.

“It looks like we’re subsidizing these businesses,” Bayerkohler said.

Rahm said the dollar amounts were set up through the Ignite Company, which was hired to set up sponsorship packages for the arena/expo.

Council member David Sturrock said the city should consider the relative values of sponsorship packages in the future, when the contracts come up for renewal.

Council members voted 4-2 to approve the sponsorship agreement with Ace Hardware of Marshall. Sturrock and Bayerkohler cast the votes against, and council member Larry Doom abstained. The sponsorship agreement with Viking Coca-Cola was approved 5-2, with Sturrock and Bayerkohler casting the votes against. The sponsorship agreement with D&G Excavating was approved 6-1, with Bayerkohler casting the vote against.

No members of the public showed up for a hearing on proposed city ordinances regulating “tiny houses.” Under the ordinances, a house would need to have a footprint of at least 500 square feet and have dimensions of at least 24 feet in any direction to be built in residential districts in Marshall. Houses smaller than 500 square feet would be permitted, but only in areas zoned for manufactured housing, said Marshall public works director Glenn Olson.

Council members voted to approve the ordinance.

The council voted to approve an agreement with the Lyon County landfill to treat leachate at Marshall’s wastewater facility. The landfill currently hauls leachate – wastewater formed from decomposing landfill waste and rainwater – to Sioux Falls for disposal.

Marshall wastewater superintendent Bob VanMoer said the agreement updates a past agreement with the landfill.