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Magnolia Hotels Plans for Conversion of Durham, North Carolina's SunTrust Building
into Boutique Hotel and Spa Moving Along

By Laura Oleniacz, The Herald-Sun, Durham, N.C.McClatchy-Tribune Regional News

July 23, 2011--DURHAM -- Officials from the Denver, Colo.-based Magnolia Hotels Management Co. that manages a group of hotels sprinkled around the country were in Durham this week to take a look at the downtown SunTrust tower, a building that's proposed to be redeveloped into a boutique hotel and spa.

Tom Evans, vice president of acquisition and development for Magnolia Hotels, said the company is partnering with the Durham-based real estate development company Greenfire Development to bring the hotel project to fruition.

Evans said he was in Durham on Tuesday and Wednesday to work with Greenfire officials, and said the groups are "moving along with the plans" for the hotel project. He declined to give specific details about those plans and details will be released in a future announcement.

"We see a great future in Durham, and that was why we visited, and that was why we've worked to partner with Greenfire," Evans said. "We see a lot of potential and we're really excited to get involved. The building there, the two buildings, are beautiful."

Evans said the company has hotels in Denver, Dallas, Houston, and in Omaha, Neb., and also manages a smaller hotel in the city of Bryan, Texas.

Each of those hotels was "similar in character" to the SunTrust building, a landmark in Durham on Corcoran Street downtown that's a prominent feature in the city's skyline.

"They were historic, city center office buildings that were converted to hotel use," he said, adding that Magnolia's first city center hotel was an abandoned bank building in Denver that was converted into a hotel use.

"We think it's just, over long periods of time, we think that city centers are really the best place to be, and redevelopment of these buildings is just a great way to bring very prominent, beautiful buildings back to life," he said.

He said the company has been interested in the Durham market for "a long time."

"We see so much going on in the city with just the exploding food culture, the really active and engaged business community, the educational and medical businesses there, the new performing arts center, all of these things are really, really exciting developments, and we think that it's just a very good fit for what we do," he said.

Durham Mayor Bill Bell said he met with officials from Magnolia during their visit and he said he got "good vibes" about their plans for the building, which include a rooftop pool and a restaurant portion.

Bill Kalkhof, president of the downtown revitalization-focused group Downtown Durham Inc., said he also has met with officials from company, the first time about four months ago.

Kalkhof said he learned on a subsequent visit that not only were company officials interested in doing business in the Bull City, but were seriously considering making an equity investment in the SunTrust redevelopment project.

"I think it was a really, a very good vote of confidence, not only for Greenfire, but for downtown Durham that this company that has headquarters in Denver is not only looking to manage a significant hotel operation here, but also put some money into the project, put some equity in the deal -- that was very exciting for me," he said.

Earlier this week, city officials confirmed that Greenfire Development was able to meet a deadline required for the company to be eligible for $4.2 million in city incentives for the project.

Greenfire had until July 31 to begin construction work on the downtown landmark to qualify for the performance-based incentives slated to help cover the $55 million total renovation cost.

City officials said Greenfire met the deadline by applying for a building permit to do internal demolition work on the Corcoran Street tower, also known as the Hill Building.

Calls made to Greenfire officials were not returned in time for this article.


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Copyright (c) 2011, The Herald-Sun, Durham, N.C.

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