Local investors join in hotel plan
Local businessman Randall Kaplan wants to prove the skeptics wrong about a proposed luxury hotel in downtown Greensboro.
As a new partner with the group that proposed the hotel last summer, Kaplan believes the combination of his local investment group and Urban Hotel Group gives added strength to the venture.
Kaplan is the managing partner of the Elm Street Center, which houses the Empire Room and the Regency Room banquet and meeting facilities.
The center’s investors include such established local business people as Milton Kern , who owns and manages properties downtown, chef Brad Semon of The Painted Plate and attorney George House.
The Elm Street Center group has joined with Urban Hotel Group by offering a parking deck it owns near Davie Street for the hotel site. That gives the hotel a connection with Elm Street Center’s meeting space.
Bridget Chisholm, a Memphis businesswoman who is a principal with Urban Hotel Group, initially had proposed the hotel for the city’s South Elm Street redevelopment zone south of Lee Street. But many in the community suggested that site would be a bad place for a luxury hotel.
With a new site, however, Kaplan believes the hotel will win community approval as a new anchor building for downtown growth.
The new hotel group is scheduled to ask the Greensboro City Council to approve the financing, called “recovery zone bonds,” on Jan. 19.
If approved, the recovery zone bonds would be issued through Guilford County’s bond authority. The project developer, not the local or federal government, would be responsible for paying the debt.
The advantage of using this type of financing is the lower interest rate, said City Finance Director Rick Lusk. Based on the current situation, Lusk estimated that the project might get about a 4.5 percent interest rate.
The bonds are tax-exempt for investors, meaning that the interest income they earn from the bonds cannot be taxed. Those investors, typically private companies, who purchase the bonds will be responsible if the developer cannot repay the loan. Two other projects, a downtown apartment building with a restaurant and a building that would be leased to Deep Roots Market , also hope to take advantage of the bond program.
Kaplan believes his group’s willingness to sink its land and expertise into the hotel deal should present the best case for the project.
“I think we’re looking to Bridget to sort of lead the partnership group in moving forward,” Kaplan said. “She has the expertise. We’re going to be actively involved in all of the selection of architects, builders, design, etc. We’re putting in a tremendous amount of assets and value.”
Kaplan said his group, which has studied the hotel market for more than two years, is still studying how large the hotel should be and what rates it should charge.
Many questioned the viability of Urban Hotel Group’s earlier suggested room rate of more than $200 a night.
“People have fixated on $200 a night, which is actually sort of on the high end,” Kaplan said. “We will look at the models at all kinds of price ranges in order to assess where the thresholds are. Two hundred a night was kind of a high-end rate but that is not where the analysis begins and ends.”
Situated between N.C. A&T and UNCG and just a few blocks from the Elon University School of Law, the hotel and its Elm Street Center meeting rooms should have plenty of business, Kaplan says.
Another key asset will be the International Civil Rights Center & Museum, which will open Feb. 1 this year, just across the street from the proposed hotel complex.
Kaplan said the investor groups plan to maintain local ownership in the hotel.
Staff writer Amanda Lehmert contributed to this report.
Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com
Accompanying Photos
Photo Caption: This parking deck is part of the property being considered for a new luxury hotel in downtown Greensboro.
City council insider
News and notes from the City Council meeting on Tuesday.
- Council members agreed to delay the rehearing of a controversial North Elm Street and Cornwallis Road rezoning at the request of the applicant. The issue will be heard in February.
- The council transferred Tannenbaum Park to the National Park Service, which operates the adjacent Guilford Courthouse National Military Park. The transfer will save the city $240,000 a year.
- Council members signed off on a $3.9 million construction contract with T.A. Loving for the development of Keely Park, in the northwest area of the city. The park will be built at the former Keely Nursery. Construction could start later this month.
- Mayor Bill Knight asked council members to refrain from texting during council meetings. The request came after Councilman Robbie Perkins was asked to turn over texts he exchanged with a developer during a recent council meeting. Perkins, meanwhile, said he doesn’t plan to give up his PDA.
Got a news tip? Contact staff writer Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com
Get your fill of government news online at Inside Scoop at blog.news-record.com/scoopblog.
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