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Dayton Airport Hotel's 40 Year History Had Twists and Turns;
A Multimillion-dollar Renovation Halted, Abandoned

By John Nolan, Dayton Daily News, OhioMcClatchy-Tribune Regional News

February 1, 2010 --DAYTON -- The recent history of the 40-year-old Dayton Airport Hotel, which was permanently shut down this weekend and awaits demolition, is full of twists and turns.

Two-thirds of its approximately 150 rooms were renovated during the past decade, before the multimillion-dollar renovation was stopped and ultimately abandoned.

The plans were drawn up during the tenure of former Dayton International Airport Director Blair Conrad. Airport managers asked the city-owned hotel's operating contractor, CWB Property Management Inc., to upgrade the building to standards that could make it acceptable to brand-name operators like Clarion or Ramada. That included a $125,000 plan to install an elevator, plus plans to dress up the building's exterior with a facade.

The city dropped those plans. Airport management ultimately said the hotel's lack of brand affiliation and elevator were among the airport's reasons for closing it. The renovation improved 106 rooms, but 48 additional rooms weren't redone and were considered unrentable.

"The reason those improvements were made ... was to get a franchise agreement for the hotel," said Bill Wolfe, president of CWB Property Management, a suburban Columbus operator of hotels. "The city reached a point where it decided to examine whether it wanted to be in the hotel management business."

Iftikhar Ahmad, who took over as airport director in October 2006, more than a year after Conrad's death from cancer, stopped the renovation to reassess it. Ahmad, with support from other city officials, concluded the hotel had become a long-term drain on the airport's revenues -- including capital investment, maintenance and operating subsidies -- and permanently ended the renovation before it could be finished.

A consultant hired by the airport concluded that the old hotel was "functionally and economically obsolete."

"There was some optimism that renovating the hotel would help to spur interest in the hotel," Joey Williams, a Dayton City Commission member since 2002, said of the city's approval for spending millions in airport revenues to improve and support the building. "I do recall going to the airport shortly after being elected and saying, 'This whole area looks outdated.'

"I think Mr. Ahmad is making a good recommendation and decision, given where things are today."

A consultant's study projected that the city-owned airport could generate at least $500,000 annually -- and perhaps considerably more -- by putting an economy-rate parking lot, with credit card payment capabilities, on the site. Surveys of air travelers have shown that they want more economy-rate parking at the airport, Ahmad said.

"It's a prudent decision. We hashed it out over a period of time," Ahmad said in an interview this past week. "We get rid of a negative cash flow. We think parking would be more beneficial."

Aviation consultant Michael Boyd agreed. Other airports own on-site hotels, including the Dallas-Fort Worth Airport and its Hyatt-branded hotel, said Boyd, president of Boyd Group International Inc., of Evergreen, Colo. As long as the hotels are revenue-generating amenities, all is well, he said.

"But if it's one of those things where it's eating up a lot of money and a lot of management's time, then it's not worth it," Boyd said.

The Federal Aviation Administration requires airport revenues be used for the airport's capital or operating costs, and be "directly related to the actual transportation of passengers or property."

Ahmad said he worried that the FAA would raise objections if the Dayton airport continued to pump subsidies into the hotel to keep it operating and its 35 employees on the job. That would amount to using airport revenues purely for "general economic development," which is not allowed, said Ahmad, who was an executive with the Houston and Nashville airports before coming to Dayton.

The FAA might object if a hotel consumed airport revenues that could be used more productively, said Deandra Brooks, an FAA airport compliance specialist.

The hotel didn't generate revenues for the airport in at least half of the past decade, according to Dayton's accounting. CWB Property Management didn't pay revenues to the airport unless the hotel's revenues exceeded its operating costs, city officials said.

Expenses exceeded revenues in all but one year since 2000.

Under the airport's revamped plan, private developer White Hills LLC of Cincinnati plans to build a $15 million Holiday Inn & Suites hotel elsewhere at the airport. The new hotel will generate a guaranteed $48,800 annually in lease fees for the city-owned land it occupies, and will produce parking revenues for the airport that the current hotel does not, airport officials said. The new hotel is to open in 2011.

Some of the rooms that were left unrenovated at the old hotel still contain furniture, plumbing and lighting fixtures, wall coverings, draperies and other equipment that Dayton bought for the never-finished room renovation project. A liquidation contractor is to be hired to salvage those, before the utilities are turned off.

Most of the old hotel is to be demolished this year to make way for the parking lot. A PSA Airlines training facility at the hotel will be spared so that the Dayton-based airline can continue using it.

A total of 35 CWB Property Management employees lost their jobs this weekend. Some have found new employment.

"It was a bad situation," Ahmad said of the hotel's financial problems. "They (CWB) wanted to make it better. They had good intent. For me, it was just looking at the numbers."

Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.

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To see more of the Dayton Daily News or to subscribe to the newspaper, go to http://www.daytondailynews.com .

Copyright (c) 2010, Dayton Daily News, Ohio

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