& Suites in Boston's Roxbury Neighborhood
|July 8, 2004 - Boston celebrated its first black-owned
hotel last week when a group, led by two African American developers, cut
the ribbon on a brand new Hampton Inn & Suites in Boston.
The city's first African American-owned hotel hopes to empower community through job creation and economic development & has hired minorities to five of the hotel’s top seven senior management positions including African American, Phillip Tucker as its General Manager. .
The 175-room hotel and its adjoining 650-space parking garage, which sits at the edge of Roxbury, one of Boston's predominantly African-American neighborhoods, is an area that is beginning to see a resurgence in development after years of neglect by developers and investors. Despite the high level of traffic from hospital and university workers who pass by the site daily, it was difficult to attract investment to the project because for years, Roxbury had been viewed as a high-risk area that was plagued by violence, unemployment, and low incomes, developer Kirk Sykes explains.
The hotel's opening marks the completion of the first phase of Sykes' $140 million Boston Crosstown Center project. And local officials are hailing the project as a symbol of a “new Boston,” where old attitudes about race and class have given way to economic opportunity for all the city's residents. "This is part of a new oasis in the city. The first part of the change is to employ people in the community. You can't leave anybody behind," says Boston Mayor Thomas M. Menino.
The hotel is one of only 18 minority-owned hotels nationally that operates under a major franchise name, according to the National Association of Black Hotel Owners, Operators & Developers. (NABHOOD) The association will be hold its annual meeting in South Beach, FL July 21-24 at another African American owned hotel and is expects to attract a number of African American who are interest in hotel ownership.
But the road to finishing the hotel wasn't easy for Sykes, a board member of NABHOOD and his partners. The first phase of the project, which includes a hotel and garage, cost $65 million, including $17 million in loans and grants from the city, on land that was specially designated for development of the hotel. After the city agreed to specially zone the land in 1998 to help the project get off the ground, Sykes and his partners were able to line up $4.5 million in financing by selling a 40% stake in the project to the former Bank of Boston. African Americans will have to be very creative if they are going to succeed, said Andy Ingraham, president of The National Association of Black Hotel Owners, Operators & Developers who attended the grand opening with Floyd Pitts Senior Director of Diversity Programs for Hilton Hotels. Public Private partnerships have played a major role in creating some of the largest African American hotel deals todate, Ingraham said.
But the bank was sold to Fleet Bank, now part of Bank of America, a year later. Fleet, with a different portfolio outlook, wanted out of the deal, leaving the developers without an equity partner and also owing Fleet $2 million of the money it had already spent. Sykes and his partners were able to negotiate a deal under which Fleet agreed to allow the developers to resell its stake to another development group, Corcoran Jennison Co. The deal allowed the project to proceed with a large equity investment, but still under the control of the African American-lead development team, and eventually opened in March of this year.
During the second phase, expected to be completed in approximately three years, the complex will include an additional 600-car garage, restaurants, office space, and retail shops. Currently, Crosstown employs 98% minority and 7% women-67% of the residents in the local Empowerment Zone. “The success of this project was that it was an economic development project, not a straight development project,” says Sykes. “[The hotel is] “part of a marketing tool for the neighborhood, and a self-perpetuating economic development project, where people live and work and spend their money where they live.”
NABHOOD will hold a panel discussion with the Congressional Black Caucus in Washington, DC in September during the CBC annual meeting. We want to bring more awareness on the opportunities that exist in our industry said Ingraham, "however we need to create partnership with financial institutions that can help us change our communities and our elected officials can help us make our case".
Andy Ingraham, President
|Also See:||Boston’s First African American Owned Hotel - the New 175 room Hampton Inn & Suites Boston Crosstown Center Set to Open / April 2004|
|City of Boston Obtains $40 million from HUD Specifically for Hotel Projects; Loan Pool Designed to Speed Up Stalled Hotel Projects / August 2003|