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Kimpton Hotels Acquires the Historic Lafayette Building in Downtown Philadelphia;
Plans to Rehab into a 270-room Monaco Hotel

By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News

Oct. 20, 2010 --Kimpton Hotels and Restaurants of San Francisco plans a second outpost in Philadelphia: a Monaco hotel at the historic Lafayette Building at Fifth and Chestnut Streets.

The company, which opened the 230-room Palomar at 17th and Sansom Streets last October, proposes a 270-room hotel, an upscale restaurant at the ground floor's southwest corner, a ballroom, and 12,000 square feet of meeting space in the venerable office building, which was vacant for years.

"We love the city, with the amount of tourism and history here," Kimpton president and chief operating officer Niki Leondakis said Tuesday during an interview at Square 1682, the restaurant attached to the Palomar.

The signature Monaco design includes brightly colored, whimsical, high-energy spaces inspired by the world traveler, Leondakis said: A Monaco hotel resembles a traveler's living room, with all the stuff he's collected traipsing all over the world.

She was in town to announce that the Palomar had just been awarded gold LEED (Leadership in Energy and Environmental Design) certification by the U.S. Green Building Council for 80 environmentally conscious practices, including water and energy conservation and recycling.

It doesn't hurt that the Palomar also has exceeded company expectations revenue-wise since its debut last year.

"Certainly, the performance of the Palomar helped us with the decision" to build a second hotel here, Leondakis said. "But we've been looking in this market for several years."

Since 2007, she said, Kimpton has had its eye on the Lafayette Building because of its ideal location just across from Independence Hall and because it was another historic building that could easily be converted into a hotel - an adaptive reuse that has become eco-friendly Kimpton's specialty.

Timing was a factor, too, Leondakis said, with the March opening of the Convention Center's expansion expected to draw a slew of new conventioneers to the city.

Kimpton owns 51 luxury boutique hotels across the country and is flush with cash to make new investments. It purchased the Lafayette Building for $11.5 million from the Northern Group and closed on the deal last week.

The Northern Group of New York sold another piece of property, the historic Architects Building at 117 S. 17th St., to Kimpton three years ago for $22 million. That building became the Palomar.

The company presented its plans for the 195,000-square-foot Lafayette Building to the Old City Civic Association Aug. 31, according to the group's website.

Philadelphia "works really well as a feeder market for our other East Coast hotels," Leondakis said. Kimpton began an East Coast invasion 11 years ago and already has multiple sites in New York, Washington, and Boston.

Last year, it turned the 1904 B&O Railroad building in downtown Baltimore into a Monaco. Other Monaco hotel locations include Washington, San Francisco, and Chicago.

For the hotel business, "the East Coast is rebounding nicely," Leondakis said, "more quickly than other parts of the country."

The planned Monaco here is scheduled to debut in the third quarter of 2012. It will compete directly with the high-end Omni Hotel at Fourth and Chestnut Streets for conventioneers, leisure travelers, and individual business travelers.

Leondakis said construction would begin in the spring. The Monaco is the only new hotel going up in Center City, primarily because of a tight lending environment.

Ed Grose, of the Greater Philadelphia Hotel Association, said Kimpton has "a proven track record of turning historic buildings into beautiful hotels."

"It will also be the closest hotel to Independence Mall, the Constitution Center, Independence Visitors Center, the Liberty Bell, and the soon-to-open American Jewish History Museum," he said.

At Tuesday's ceremony honoring the Palomar as the city's first LEED-certified hotel, Mayor Nutter said the Monaco announcement comes down to one thing: "Jobs, jobs, jobs."

"This is great news for us in these tough, economic times," he said.

Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

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To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.

Copyright (c) 2010, The Philadelphia Inquirer

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