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Director along with the Lodging Tax Advisory Committee tracks Lodging Tax revenues. <br />Revenues have increased evely yeal but one since the recession, which adversely affected rates <br />in 2009. So far in 2015, monthly Lodging Tax revenues have increased every month but one <br />and, baring any unforeseen circumstances, 2015 will represent a record year in Lodging Tax <br />collection. This is a positive trend that is likely to continue and points to increasing demand <br />placing positive upward pressure on the local hotel market. <br />National h'ends in hotel and visitor stays point to continued interest in alternative forms of <br />lodging, including smaller boutique inns, self-catering inns, and specialty lodging that are close <br />to tourist attractions and are within walking distance of the area's key restaurant and dining <br />options. National hotel chains are paying attention to this trend and have responded with creative <br />brands such as Hotel Indigo by IHG, Canopy and Curio by Hilton, and Aloft by Westin to <br />address this demand. Furthermore, this trend is migrating from bigger city markets to smaller <br />communities where both independent hotels and chain affiliated hotels are being developed in <br />downtowns even while other hotel products in the markets continue to thrive. <br />2.3.7 Office Market Opportunities <br />Perhaps the most difficult market to evaluate in a cornmunity like Ellensburg is the office <br />market. There is little speculative office space in the market and as a consequence there is no <br />historic absorption rates, consistent rent rates, and vacancy rates. The issue is exacerbated in <br />downtown where upper floors that might be conducive to office space are in various states of <br />repatr. <br />During the interview process, the price of $10 per square foot a year was cited as reasonable for <br />space that was already suitable for a tenant. This rate hovers just at a level where buildings <br />ownerc have difficulty maintaining old buildings for the rent they are commanding. Ideally, the <br />market should work to slowly get the rental rates from $10 per square foot to $12 per square <br />foot. An effective way to do this is to develop "right-sized" ground floor spaces that work for <br />smaller specialty shops. <br />The recommendations portion of this report will explore some creative solutions to jump start <br />office space use in downtown Ellensburg and work toward slowly escalating rent returns to allow <br />for additional investment in downtown buildings. <br />20