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Wasn't the Nathan Hale a university project? So, there would be some history of UConn getting involved, no?
The old Kathy John's site would make a lot of sense from a convenient standpoint but doesn't Storrs Center make the most sense for a hotel?
Nathan Hale was built in that spot to take advantage of the conference facilities available at Rome Cafeteria.
UConn absolutely needs a hotel on-campus. Many universities have a university built, privately managed hotel on campus whereby students in hotel/entertainment majors also work and study. When people, alumni, professors, research, etc., visit campus, they want to stay n campus, be able to walk around, see a game/show, pretend they are 20 again, etc.