New hotels in Alva fill up due to oil industry

ALVA, Okla. — Two new hotels nearly ready to open on the eastern side of Alva are a welcome sight to city officials who say the rural community needs housing for the oil-field industry.

And even with a total of 125 additional rooms at Comfort Inn & Suites and Holiday Inn Express, the city of 5,000 residents could probably support more, City Manager Joe Don Dunham said.

“These hotels have been a large growth factor for Alva,” he said. “It’s easy to see additional economic development associated with those properties. . We’ve needed the housing space for a while; this fills a need for the town and we’re glad to have it.”

Alva has become a social nexus for oil-field workers in recent years. Much of the increase in oil and natural gas drilling activity in northwestern Oklahoma and southern Kansas is related to the so-called Mississippi limestone formation, a thick but porous carbonate geological structure that extends over millions of acres. Chesapeake Energy, for example, began horizontal drilling in the Mississippi play in Woods County in 2007, and production quickly spread through Grand and Alfalfa counties. Petroleum industry trucks pass through Alva daily – SandRidge has a base of operations just east of the city on U.S. Highway 64.

The petroleum industry has been an economic boon to Alva and has been prompting the opening of several new stores such as the Burlap Bungalow in downtown, said Alex Mantz, executive director of the Alva Chamber of Commerce. Michelle Mackey said she reopened the Daisy Village retail shop because of the obvious strength of the economy.

But petroleum has brought a few problems as well, such as at Northwestern Oklahoma State University at the heart of the city.

“It’s created a housing crunch in Alva, which has made it much more challenging for our students to find places to live off-campus. The rental rates have gone up,” school spokesman Steven J. Valencia said. “Before this recent oil boom started, housing was readily available and very inexpensive compared to most college communities. That model has been turned on its head in the last 18 months.”

That crunch has caused on-campus residence hall occupancy to rise to near capacity, which is generally good for NWOSU, Valencia said. But the industry is also creating jobs that lure away school staff members.

“And replacing those nonteaching employees is becoming increasingly difficult because of wage inflation,” he said.

The school offers a wide range of bachelor’s degrees in fields such as dentistry, physical therapy, pharmacy and veterinary medicine. The Alva campus of NWOSU also offers a master’s degree in education and a master of counseling psychology.

Valencia said the school can’t afford to develop a petroleum engineering or geology program of its own to tap into increased interest in the petroleum industry in that part of the state; however, accounting degrees are a good fit.

“There is a very significant market for accountants in the energy sector, and those people will potentially be snatched up by the oil-field industry,” he said.

Overall, the presence of petroleum in Alva has helped boost the city’s economy and school’s finances, he said. Private donations alone have grown from $2.1 million in fiscal year 2009 to a record $4.4 million in 2012. And a few more hotels will help support students’ visiting families, sports and other special activities.

The hotels are being built next to each other on unincorporated land on the eastern edge of the city. Dunham said no other site in town could have supported the development.

Alva is just shy of 2.4 square miles, or 1,500 acres. Once hotel construction was well under way, the City Council annexed 25 acres to simplify connections to the municipal infrastructure, Dunham said. All work was done in accordance to city code; the city invested to extend utility lines to the property.

City officials said they’re not overly concerned about petroleum interest collapsing any time soon, leaving hotels and other support businesses without customers. Dunham said conservative financial planning will ensure that Alva’s sales tax-based budget doesn’t become too reliant on transient residents. And Mantz said it would hurt to see oil-field workers disappear, but the city can stand on its own as a college town with small sports events tourism and surrounding agriculture.

“We’ve needed these hotel rooms for other events throughout the year,” Mantz said. “We’ll be able to fill them pretty easily. They’re not just a reflection of the oil boom, even though the industry is obviously helping drive it forward.”

“If at some point this oil boom ends, this community will still do very well,” Mantz said.