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Marcus Corporation Bought the Wyndham Milwaukee Center Hotel for $23.6 million
 and Now Transforming the 220 room Hotel with a Multimillion-dollar Remodeling
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By Tom Daykin, Milwaukee Journal SentinelMcClatchy-Tribune Business News

Oct. 23, 2006 - Marcus Corp. executives for years cast longing gazes at the Wyndham Milwaukee Center Hotel, one of their bigger competitors, and considered the possibilities. The 220-room Wyndham opened in 1988 at 139 E. Kilbourn Ave., near some of downtown's larger office buildings and cultural attractions, and never lacked for business. But its owners, a group of investors from Texas and other states, weren't taking full advantage of the hotel's strong location, said Bill Otto, president of Marcus Corp.'s hotels division.

The Wyndham's lobby was large, but lacked pizzazz. The hotel's restaurant and bar were adequate, but not special. Ditto for the rooms, said Otto. So, more than a year after Marcus bought the Wyndham for $23.6 million, the hotel is being transformed through a multimillion-dollar remodeling.

Company executives calculate that Wyndham customers will accept higher room rates, and pricey restaurant and bar tabs, to be in downtown's "cool" hotel. "We want to be the talked-about place," said Mark Knauer, whose Deerfield, Ill., interior design firm is helping remake the Wyndham. Marcus won't disclose cost estimates. But the project is among this year's largest capital investments by Marcus, which counts downtown's Hilton Milwaukee City Center and the Pfister Hotel among its properties.

Marcus, which also operates movie theaters, generated revenue of $289.2 million and net income of $28.3 million in its latest fiscal year. About half of the company's revenue, and one-third of its operating profit, came from hotels and resorts owned or managed by Marcus. The Wyndham renovations, which began this summer, are to be completed by the end of the year.

The Wyndham's operating results are expected to suffer during the project, as some hotel rooms temporarily can't be used, according to the company's annual report. But the payoff will come once the work is done, Otto said. "This is an entirely different hotel," he said.

Urban, sophisticated feel

The idea, Knauer said, is to create a hotel with an urban, sophisticated feel that draws customers -- including lounge and restaurant denizens -- who are somewhat younger than Marcus' customers at the Pfister and Hilton. That would help the Wyndham stand out among downtown hotels, and avoid the prospect of cannibalizing business from the other downtown Marcus properties, Otto said.

Otto views the 307-room Pfister, 424 E. Wisconsin Ave., as the city's established "grand dame" that is heavily focused on business travelers; the 730-room Hilton, 509 W. Wisconsin Ave., as Milwaukee's main convention center hotel; and the Wyndham as rooted in the cultural and nightlife district, with the Milwaukee Repertory Theater, Pabst Theater and Marcus Center for the Performing Arts all nearby. The Wyndham's locale lends itself to the "cool" moniker. But cool comes with a price. Rates at the Wyndham's newly remodeled rooms will start at $169 a night, up about $35 from the starting rates under the old ownership, Otto said.

The Wyndham's upgrades appear to be a smart strategic move by Marcus, said James Hummert, who operates the 64-room Hotel Metro, a downtown boutique hotel. Hummert expects downtown Milwaukee's hotel rates to rise over the next few years as travelers respond to various hotel improvements, including a new spa at Hotel Metro, 411 E. Mason St.

Other market changes include the new 138-room Hampton Inn & Suites, 176 W. Wisconsin Ave., which this summer replaced the Howard Johnson Inn & Suites with higher rates after a $7 million remodeling. Meanwhile, developer Doug Weas earlier this year bought a site at the southeast corner of N. Broadway and E. St. Paul Ave., in the Historic Third Ward, where he plans to develop a 150-room Renaissance ClubSport by Marriott, part of a mixed-use project. Also, developer Richard Ruvin and Dallas-based Gatehouse Capital Corp. plan a mixed-use project that would include an upscale 175-room hotel on a parcel bordered by N. Old World 3rd and N. 4th streets, and W. Juneau and W. McKinley avenues.

Staying a step ahead

Much of the Wyndham's new look is starting to show. The hotel's new lobby restaurant and lounge, Clear, opened in September. Clear draws its name from the large windows that make it visible from E. Kilbourn Ave. and N. Water St., and from its focus on vodka, rum and other clear spirits. Clear also serves breakfast, and a light menu for lunch and dinner. It will help "energize" the lobby by drawing both hotel guests and the public, Knauer said.

Another new lounge, Zen Den, opens later this month within the Wyndham's remodeled lobby. Zen Den, a secluded, upscale cocktail lounge, will include music provided by DJs. It will be aimed in part at the same crowd found in such Milwaukee St. lounges as Eve and Tangerine, Knauer said. The hotel's second-story restaurant, Kil@Wat, opened for dinner earlier this month, and begins serving lunch Oct. 23.

Kil@Wat -- a reference to the Kilbourn at Water location -- replaces the former Kilbourn Cafe. Its menu uses comfort foods prepared in different, surprising ways, said Larry Flam, director of restaurant operations for Marcus. Entrees include lobster pot pie, and a burger with foie gras. Marc Bianchini, whose family operates Osteria del Mondo and Cubanitas restaurants, helped develop the new menu. "We're not going to do things that are way out there," Flam said. "But we are going to do things that are a step ahead of the dining scene in Milwaukee."

The restaurant's design is sleek and modern -- an about-face from the more traditional Kilbourn Cafe. Those changes carry over into the hotel's guest rooms, where flat-screen TVs and two-stream showers are among the new furnishings. Similar modern touches are found in the Wyndham's meeting rooms, including space that will be rented to local art galleries and will be available for catered events. The lobby has other changes, including the replacement of a traditional chandelier with strings of abalone sea shells. "We're trying to have the hotel add to the excitement of the restaurant," said Knauer.

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Copyright (c) 2006, Milwaukee Journal Sentinel

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