Akron, Ohio Business Leaders Believe New Modern Hotel is a Must to Rebuild Downtown Area
The Akron Aeros must book 1,400 hotel room nights a season for visiting baseball teams.
After the University of Akron converted the former Quaker Square hotel to student housing this summer, team owner Ken Babby had to find another place to host the visiting players, coaches and umpires for the rest of the season.
Rather than going with the Akron Citicenter, the only remaining downtown Akron hotel, he chose hotels in the Fairlawn area.
“The Citicenter does not meet the standards of the Eastern League and visiting teams,” said Babby, who just finished his first season as the Aeros’ new owner.
Babby is among a cadre of business and government leaders who want an alternative to the 42-year-old Akron Citicenter, a former Radisson and Ramada that a new operator is trying to refurbish. They think a new hotel is needed to serve local businesses, hospitals, the convention center and the University of Akron.
“I think the need for a downtown hotel is just a must for this larger puzzle of rebuilding downtown living from a business standpoint,” Babby said.
The challenge for mid-size cities like Akron, though, is securing the funding. Bob Bowman, Akron’s deputy mayor of economic development, said lenders are more reluctant to loan money for a hotel project than they were before the recession, offering to put up 60 percent, where before they would go up to 80. This leaves a 40 percent hurdle.
“The question becomes: Who fills the gap?” Bowman said, noting that the eight hotel developers who approached Akron in the past five years were looking for tax breaks from the city.
Akron and Canton are the only major Ohio cities with one downtown hotel. Dayton and Toledo, which are more similar in size to Akron, have two each.
While downtown Akron hasn’t seen a new hotel since 1980, many new hotels, motels and extended-stay facilities have congregated in the suburbs in the last several years. They locate near airports and interchanges with extensive parking, shopping and restaurant selection already in place. New projects are planned or underway in Fairlawn and Green, and Lake, Plain and Jackson townships.
Building a suburban hotel is less costly than constructing one downtown, said Jeff Sachs of Strategic Advisory Group in the Atlanta area, which has advised on hotel projects that provide more than 37,000 rooms.
“It’s easier to build in the suburbs than in an urban core where you might have to tear things down, and you have the risk of what’s underground,” Sachs said. Land can be cheaper, too.
“And it also is really about demand,” he said. “The money always seems to work out if there is demand.”
The race is on to be the first new hotel in downtown Akron, with two projects emerging as frontrunners. Joel Testa, a Cuyahoga Falls developer, says he is close to breaking ground on a Courtyard by Marriott beside his Northside Lofts. Amerimar Realty Co. of Philadelphia has partnered with a group of local businessmen and is assembling financing to build a hotel adjacent to Greystone Hall across from the John S. Knight Center.
Meanwhile, those in charge of the Akron Citicenter Hotel say they have been unable to get financing for improvements, although some have been made. Scott Hartmann, the hotel’s assistant general manager, says the 243-room hotel offers its own attraction: a place to stay cheap. (Rooms go for as low as $89 a night.)
He pointed out that Greystone developers plan to spend $40 million.
“That’s big dollars. That’s Ritz Carlton money,” Hartmann said, suggesting that Greystone’s rates will be higher. “We’re not that [a Ritz]. That is not us. We’re trying to be a friendly, clean hotel.”
A 2011 study done by Tetra Tech, a Pasadena consulting company, for University Park Alliance predicted increasing demand for a downtown hotel in the next 17 years to serve the needs of Summa Health System, the University of Akron and downtown businesses. The study showed a demand for 1,200 rooms this year, rising to 1,450 rooms by 2030.
Gregg Mervis, the chief executive of the Akron/Summit County Convention & Visitors Bureau, said the lack of a quality hotel within walking distance often renders the city unable to bid on conventions. He pointed to a 2011 Ohio State Bar Association conference with 1,000 people and an Ohio Library Council convention this month with 500 people.
“It does present a challenge in a recovering economy to find [convention] business to start with,” Mervis said. The hotel challenge “is a difficult one to overcome.”
Local business and civic leaders who attended recent Greater Akron Chamber trips to Omaha and Milwaukee returned with wish lists that included a quality downtown hotel. Both Midwest cities boast thriving downtown hotels.
GOJO Industries Inc. CEO Joe Kanfer, whose company is headquartered on the southern edge of downtown, said GOJO would use the rooms and meeting space. His company holds its annual meetings at the convention center, and company visitors stay in suburban hotels.
“There’s not a business person in Akron who doesn’t think we need a [new] hotel,” he said.
Testa, who revealed plans for a new Marriott hotel on his Northside property three years ago, pledged in a recent interview that, “Ours will be the first new hotel to open.”
Although he and his partners are still seeking financing, he expects to see final drawings soon, to have a groundbreaking ceremony in the next 60 days, work through the winter and open a $16 million, 10-story, 120-room hotel in the spring of 2015.
Testa’s site on the north edge of downtown includes his Northside Lofts condominiums and chef Dante Boccuzzi’s restaurant called dba.
Testa said the delay was caused by a couple of wrinkles that he predicts ultimately will make the product better. He teamed up with Concord Hospitality, a Raleigh, N.C., company that will be a 50-50 partner in the development and ownership of the hotel. Concord, which owns and operates 91 hotels in the United States and Canada and has 10 under construction, also will manage the hotel.
Also slowing the project was a decision to revise plans after learning that Marriott had developed a new ultra-modern design.
The hotel won’t be full service, although there will be at least one, and potentially more, restaurants on site. It will feature a fitness center, swimming pool, outdoor patio, small private theater, six extended-stay suites, two banquet rooms and a conference room.
Testa said he isn’t concerned about the potential competition because the Greystone hotel will be focused on convention visitors.
“I think Akron attracts more people than either one could service on its own and the growth we anticipate will increase demand,” he said.
Testa also doesn’t see plans for a Hilton Garden Inn next to the new Goodyear Tire & Rubber Co. headquarters as competition. Marriott patrons have loyalty cards that assure a certain amount of business, and he thinks the East Market Street hotel will be focused on serving Goodyear visitors, not downtown.
Mark Laport, Concord’s president and chief executive officer, said the industry for years was focused on suburbs, but there is a renewed interest in large cities that is trickling down to mid-size cities. He said seven hotels are under construction in Cincinnati and Concord hopes to open a new hotel in downtown Cleveland.
“People across the country are starting to say, ‘I like the idea of being closer to the action,'” he said.
While plans for a new hotel attached to the historic Greystone Hall became public in July, talks had been going on for months.
Bill Ginter, one of five local businessmen in Greystone Partners LLC that has been spearheading the project, says the team talked to a few national hotel chains about the idea. But, he said, Amerimar officials, who have experience rehabbing older properties and operating hotels, were “the first folks we talked to whose eyes lit up and got the concept immediately.”
Amerimar already was in talks with the city to convert the former Firestone Tire & Rubber Co. headquarters in South Akron into offices and other facilities.
The Greystone project involves renovation of the seven-story building at Mill and High Streets and construction of a new glass-and-brick, 160-room hotel next door, on the site of the former High Street Christian Church.
A glass atrium would connect Greystone and the new building, which would house traditional and extended-stay rooms, a swimming pool and a fitness center. Greystone, a former Masonic hall dating to 1917, is full of architectural details. It will house a restaurant, banquet and meeting facilities. The hotel would not be affiliated with a national hotel chain.
Jim Loveman, director of Amerimar, said no formal discussions have taken place with lenders, so it is likely to be “months and months” before the money is in place.
The hope is that construction begins in 2014, with an opening in the latter part of 2015, Loveman said.
The Akron City Council last month declared Greystone a historic landmark and voted to lease the building to Greystone Partners. The city has applied for historic tax credits for the property, which are designed to spur the rehabilitation. Developers raise construction money by selling the tax credits to investors, who use them to trim their tax bills.
Ginter said he sees the hotel becoming “a center for the community, a gathering place.”
The Akron Citicenter Hotel has gone through several owners and flown the flag of several chains.
The 19-floor building is part of the Cascade Plaza project, once downtown’s urban renewal centerpiece.
Originally a Holiday Inn, David Brennan and other local business owners bought the building for $900,000 in 1993 and invested $9.6 million in renovations. The hotel reopened as a Ramada and was later a Radisson. Brennan put it up for sale in 2008 and it lost its Radisson flag that year.
Jack Saheid, a Texas resident and owner of other hotels, struck a deal with Brennan and took over the hotel in April 2011, with the terms never disclosed. He secured a Ramada affiliation, but later dropped it.
Saheid said that he replaced the roof, updated the fire alarm system and did some redecorating “at substantial cost.” He said he has been unable to secure about $5.5 million to pay off his debt on the property and for significant renovations.
“I had visions of making this a Trump Plaza,” Saheid said. “I can put in a certain amount of money. … And, I’ve been putting in $40,000 to $50,000 a month from other places just to keep the place going, to pay staff wages, [make] minor repairs.”
Saheid described business as “pretty poor” and said he thinks the hotel has been hurt by businesses that have left downtown. Still, he thinks the rooms are “not bad at all” and doesn’t understand the hotel’s poor reputation. “I wish people would come and have a look … and they would have a pleasant surprise,” Saheid said, noting he plans to redecorate the property’s two large ballrooms.
Hartmann, the assistant manager, is optimistic and pointed out that the hotel sold out its rooms several times this year, including on the night before the Akron Marathon.
“Anything that is going to help the city is going to help us,” Hartmann said. “I honestly feel confident about our future here.”
Saheid said he has discussed with Akron the possibility of obtaining the same tax benefits discussed with the new hotel proponents. Bowman, Akron’s deputy mayor of economic development, said the project must show increased value to qualify.
Saheid said he wonders about downtown’s ability to support all of the planned rooms. Revitalizing his hotel, he said, could be enough.
“Once this hotel is revamped, then, in my humble opinion, I don’t think you will need another hotel in downtown Akron.”
Stephanie Warsmith can be reached at 330-996-3705, firstname.lastname@example.org or on Twitter: @swarsmith. Katie Byard can be reached at 330-996-3781 or email@example.com.