 GREENSBORO NEWS |
Downtown hotel construction proposal approved
by Yasmine Regester
Carolina Peacemaker
Originally posted 7/28/2010
Greensboro is well on its way to getting a new downtown hotel after The Urban Hotel Group (UHG) and the Elm Street Center, LLC (ESC) received approval Tuesday, July 20 from Guilford County’s bond authority on their hotel proposal.
The Guilford County Industrial Facilities and Pollution Control Financing Authority are acting as the issuers for the bonds (funds) per the guidelines in the American Recovery and Reinvestment Act. This was the second time the hotel project was brought to the county bond commission. The last time was in November 2009. Developers decided to redesign the project proposal and submit it in the second round of Recovery Zone Facility Bonds.
The project now proceeds to the next stage, which is approval by the Tax Reform Allocation Committee and then the Local Government Commission in Raleigh. “We took the time to look at the site and leverage the existing equity of the Elm Street location,” said Bridget Chisholm, CEO of UHG. If approved by both boards, it will come back to the Guilford County Board of Commissioners, who will hold a public hearing on the project. Approval from the commissioners will allow the bond authority to issue the bonds for construction to begin, which is slated to start at the end of 2010 and could take up to 14 months to build.
The luxury hotel will be built downtown on the corner of South Elm Street and February One Place, where the Empire Room is located. The proposed hotel will be built across the street from the International Civil Rights Center and Museum. The 10-story, 180-room hotel is being developed by The Urban Hotel Group (UHG) and the Elm Street Center, LLC (ESC), both of Greensboro. The hotel is being built in what is considered a prime location for business due to its proximity to area colleges, entertainment, and businesses. The project is planned to create more than 300 construction jobs and 100 permanent wage jobs. Proposed hotel rates will begin at $159 a night at the opening in spring 2012 and are projected to rise to $190 a night by 2016.
UHG is a North Carolina private developer of hotels and hospitality-related businesses owned by founders Marlon Phoenix, founder of Royal Phoenix Development, LLC. , a Memphis, Tennessee based developer of luxury hotels and resort properties; and Bridget Chisholm, founder of a Greensboro financial advisory business called Building Wealth and Communities Consulting. Other UHG development team members include Barbara Akins, president of the Ole Asheboro Street Neighborhood Association, Inc. and Lori A. Harris, president of L.A. Harris & Associates, Inc.
Guilford County Commissioner Melvin “Skip” Alston is also a key player in the hotel, serving as the real estate broker. He is also owner of The Alston Realty Group, Inc. Alston declined to comment on any conflict of interest between his position on the County Commissioners and his part in the hotel.
In addition to developing a downtown Greensboro hotel, UHG is also in the process of developing a $75 million, 300 room hotel project in downtown Memphis, Tennessee; and a property in Spring Lake, N.C.
ESC is a partnership of local Greensboro business owners committed to the redevelopment of downtown Greensboro. Randall Kaplan is the managing partner of the Elm Street Center, which houses the Empire Room and the Regency Room banquet and meeting facilities. Kaplan is also owner and CEO of Capsule Group, LLC., a private investment company in Greensboro. The other ESC development team members are George House, a partner at Brooks, Pierce, McLendon, Humphrey & Leonard, a Greensboro law firm; Debby Reynolds, Managing Partner of Trace Holdings, a Greensboro development company; and Brad B. Semon, manager of banquet/catering services at the Empire Room and Regency Room in the Elm Street Center.
The hotel is now a $38 million dollar project, down from the first estimate of $44 million. Developers are trying to secure funding from Recovery Zone Facility Bonds in the amount of $26 million. They are estimating an excess of $250 million in economic impact over the next 20 years.
An attempt to stall construction began with a lawsuit filed by Dennis Quaintance and Mike Weaver, owners of the O. Henry and Proximity Hotels, who believe the project was being rushed and had not been carefully considered by city and county officials before their initial approval of allocated funds. The lawsuit was dropped after developers took the time to redesign their hotel proposal in more detail. Quaintance explained the two were never in opposition of the hotel, they simply wanted the city and county to set criteria on how to spend the stimulus package money. “We were concerned about the lack of process employed by the city and county. They voted on it but didn’t even consider what would happen. We wanted them to use a similar process that other cities used by setting criteria on how to use the stimulus package. The stimulus package is a big deal and we pointed out some of the other cities’ procedures and suggested that they use them and we pointed them out in a pretty distinct way,” said Quaintance. Weaver could not be reached for comment.
Quaintance added, “I’m a hotel expert and I wouldn’t invest my money somewhere without a comprehensive feasibility study first. We wanted someone to study the viability and make sure the federal resources are being used in the optimal way. The city and county should make sure they are approving something that has been properly studied.”
In a new proposal submitted to Guilford County’s bond authority by UHG and ESC on July 6, 2010, it was noted that a full market feasibility study was conducted by HVS Consulting and Valuation Service and then was confirmed by hotel development advising company called Crow Hospitality Group, LLC., that attested to the viability of the project.
The new proposal reduced the number of rooms from 200 to 180, resulting in a cost savings of $8 million. The demolition of the Davie Street parking deck has been deemed necessary to demolish in order to build the hotel however, the Guilford County bond authority remains concerned about parking. Kaplan stated they will utilize surface parking on the streets and lots surrounding the hotel along Davie Street, as well as valet parking at the other downtown parking decks.
Construction plans also include an outdoor garden to be built behind the conference building. Construction is covered by Hardin Construction, a Raleigh based company and JCG and Associates, a Greensboro minority contractor.
Developers have signed a letter of intent with Wyndham Hotel Management Inc. to be the flag destination and manager of the hotel. The project has also received a commitment letter from M.R. Beal and Company Investment Bankers and Financial Advisors, a full-service investment banking firm based in New York, N.Y. to provide private placement for the bonds. Hampton Roads Ventures, LLC of Norfolk, Va. and Self-Help Ventures of Durham, N.C. will provide equity with New Market Tax Credits.
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