The Associated Press

FRANKFORT - The Fletcher administration is seeking a developer to build a resort hotel on the grounds of the Kentucky Horse Park in Lexington, Commerce Secretary Jim Host said.

If a deal is struck, construction could start next year. The hotel complex would be the first commercially operated resort inside a Kentucky state park. Seventeen parks have state-owned lodges.

Host said a request for bids should be released soon and a developer should be chosen by the end of the year.

The Horse Park has an annual $1.7 million operating deficit that could be wiped out by revenue from the resort, Host said.

"I have pushed it like the dickens," Host said. "I think it's the key to turning things around out there."

Plans call for a hotel with at least 250 guest rooms, a conference center and a swimming pool, to be built on state land.

Although details would be settled in the bidding process, the developer would have to pay the Horse Park at least $100,000 a year and an undetermined percentage of its revenue as part of its lease for the land, said John Nicholson, the park's executive director.

The Horse Park could receive up to $2 million a year directly from the deal, Nicholson said.

Having a hotel on the grounds would help the Horse Park in its bid to host the 2010 World Equestrian Games, which is expected to draw 200,000 people over 10 days, Nicholson said.

Host said his top priority is getting the state park system to turn a profit rather than lose about $29 million a year.

The Horse Park, which opened in 1978, had 913,000 visitors last year, hosted 64 horse shows and offered a historical exhibit on the role of horses in the British Empire.

The park only generated about $6 million last year through ticket sales and various fees.

The state's General Fund had to make up the remaining $1.7 million of its budget.