From the
Asheville Citizen-Times (03/26/08)
Downtown hotels may go up as local demand stays strong
by Mark Barrett
ASHEVILLE – Hotel developers seem to think there will be a whole lot of sleeping going on downtown in a few years.
At least five different proposals to build more hotel rooms downtown have surfaced in the past couple of years, and other projects are making existing hotels more upscale.
The most recent, submitted to city government late last month, calls for construction of a 140-room upscale hotel, 350-space parking deck and 13,500 square feet of retail and office space on city-owned property across Haywood Street from the Civic Center.
If the recent history of development of residential condominiums downtown is a good guide, some of the proposals will be delayed and some will never come out of the ground.
The opposite could prove true with the hotel proposals, if only for two reasons.
The number of downtown hotel rooms has remained virtually flat for the past two decades. During that same 20-year period, the number of restaurants, shops and nightclubs downtown has grown exponentially.
“Downtown has been in such a transition. … It’s only natural that the lodging is going to follow,” said Marla Tambellini, director of marketing for the Asheville Convention and Visitors Bureau.
“It’s pretty amazing, really, that nobody has built” a downtown hotel in such a long time, city Economic Development Director Sam Powers said.
The economic slowdown may be hurting occupancy rates lately, but hotels and motels in Buncombe County in general have enjoyed strong demand in recent years, Tambellini said.
Total room sales revenue in the county was up 11 percent in 2005, 13 percent in 2006 and 8 percent last year, and the average room rate rose sharply during the same period, according to Convention and Visitors Bureau figures.
Newest plan
McKibbon Hotel Group, based in Gainesville, Ga., submitted a proposal to city government Feb. 29 to put a hotel, garage and retail space on property on Haywood Street and Page Avenue. The city bought the property in 2002 and 2003 in anticipation of building a much larger parking garage.
Opposition from the public and City Council killed the first garage proposal, so the city sent out requests for proposals for the property. McKibbon’s was the only one received by the deadline, Powers said.
The proposal shows a nine-story building with hotel and parking at the corner of Haywood and Page and says the hotel would be part of the Marriott, Hilton or Starwood families of brands. A two-story retail and office building would be located on Page Avenue near its intersection with Battle Square.
McKibbon is the same company that is exploring the possibility of putting a hotel and parking garage at the corner of Biltmore and Hilliard avenues in conjunction with city government and local downtown developer Public Interest Projects. The company has developed a number of more upscale hotels across the Southeast.
The proposal for Page and Haywood says McKibbon would build the parking garage in conjunction with the hotel. The city would buy the garage from McKibbon and lease back 149 spaces to the hotel.
The public version of the proposal doesn’t say how much the city would get for its property or pay McKibbon for the garage. Providing additional parking in the area around the Grove Arcade has been a long-term goal of city government.
Some city residents have a different goal, however: turning the property into a park.
“A lot of (building) projects take away green space,” said downtown resident Charlie Thomas, who was helped lead an informal effort to support the park. “Maybe it’s a chance for the city to give back a little green space, to say we’re not just about buildings.”
He says the idea has strong popular support: “When we went to get signatures for a petition to put a park there, it was about the easiest work I’ve ever done.”
Council is expected to consider McKibbon’s proposal this spring.
Coming attractions
The downturn in housing demand locally and nationally has pressured local developers, but officials with two planned hotel projects that would also include residential condominiums say the plans are still on track.
Developers of The Ellington, to contain 150 luxury hotel rooms and condominiums on Biltmore Avenue, plan to break ground late this year or in early 2009, spokeswoman Karen Tessier said.
That’s later than once projected. Developers did expanded market research because of changing conditions in the housing market, Tessier said, but haven’t changed their commitment to the project.
“We really don’t expect any problems, but we are being thoughtful every step of the way,” she said.
On the western end of downtown, work on the Hotel Indigo on the site of the former Asheville Area Chamber of Commerce building should begin in a few weeks, an official with that project said. It would have 100 hotel rooms and 12 residential condominiums.
Dennis Goodwin, head of a York, Pa., company that is developing the 23-story Hotel Indigo, one of a chain of boutique hotels started by the same company that owns Holiday Inn, said financing is in place: “It’s going to happen.”
Economic conditions are generally not as favorable as when the hotel was proposed, but Goodwin said such things run in cycles.
“We weathered the hotel markets through 9/11,” he said. “You can’t just stop. Asheville is a good market, and it’ll continue to be a good market.”
More tentative is a plan floated by developer Tony Fraga to build a hotel that could be as tall as 20 stories in the area around the Haywood Park Hotel. Fraga has discussed the idea with downtown businesspeople but has yet to unveil a formal proposal.
One change in the local hotel market is certain to happen. Owners of what has been the Best Western Asheville Biltmore are formally switching it to Four Points by Sheraton Asheville Downtown next week.
Renovations of the 150-room hotel took about a year and included putting a high-end steakhouse in a former nightclub space.
The change “gives us more of a chance to attract the higher-end guest,” said Angela Beattie, regional director of sales and marketing for hotel owner Hulsing Hotels.
That’s also the rationale behind changes at the Windsor Hotel on Broadway, which used to offer cheap rooms. A developer could not be reached for comment Tuesday on the status of renovations there.
Contact Mark Barrett at 828-232-5833, via e-mail at
mbarrett@ashevill.gannett.com
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