|By Amanda Lehmert, News and Record,
Greensboro, N.C.McClatchy-Tribune Regional News
Jan. 1, 2010--GREENSBORO -- A developer, a neighborhood association and a downtown partnership will work together to build a luxury hotel downtown.
Developer Urban Hotel Group worked out an agreement Thursday with Elm Street Center to turn a parking deck at Davie Street and February One Place into a 200-room hotel, said Melvin "Skip" Alston , the real estate broker for the deal.
The developer, working with the Ole Asheboro Neighborhood Association, had planned to ask the Greensboro City Council to sell 2.8 acres of redevelopment land for the project.
The hotel still faces a political hurdle later this month, when City Council members will consider whether to approve a complicated financing plan for the project.
Bridget Chisholm, Urban Hotel Group developer, has been working with the neighborhood group since the summer to propose a hotel for the city-owned South Elm Street redevelopment site. But the appraised value of the land, $1.1 million, was too high, Alston said.
Alston set Chisholm up with the Elm Street Center development group, a partnership of about a dozen local businessmen who own the Empire Room and have considered building a hotel behind it.
A feasibility study completed in 2008 said the Davie Street and February One Place location would be a good site for a 200-room hotel upward of 15 stories tall.
If built, the luxury hotel would use the Empire Room as meeting and banquet space, Alston said.
Under the partnership agreement reached Thursday, Urban Hotel Group would own 51 percent of the business, with 5 percent of that share going to the neighborhood organization, Alston said. Elm Street Center would have a 49 percent share.
The hotel entrance would face Elm Street. Plans for the building still must be designed, Alston said.
"That is going to be a tremendous boost to the downtown community," he said.
The developer still plans to ask the City Council to allow $30 million in federal Recovery Zone Facility Bonds to finance the project, plus $8 million from the city and county to build a parking garage on the site, Alston said.
It's no sure bet that the council will approve the financing or parking garage.
The federal bond money is part of a $25 billion U.S. Treasury fund to help state and local governments finance economic development. The tax-exempt bonds allow private businesses to finance projects in locally designated economic recovery zones.
Downtown Greensboro is in such a zone.
The city's staff has raised concerns, however, that Urban Hotel Group has overestimated the amount of money its hotel could take in, which could make paying down the debt difficult.
Some City Council members also have questioned whether Greensboro needs a new hotel when existing rooms are only about half full. They have wondered whether a new hotel would be viable.
"I do have a concern about the impact on our hotel industry," Mayor Bill Knight said. "We need to protect them."
A new parking deck could be paid for using income from existing city parking facilities, said interim Assistant City Manager Andy Scott.
A recent study of downtown parking needs and possible new deck locations did not look at the Davie Street site, nor did it consider the possibility of a new hotel, Scott said.
The City Council will consider the financing plan on Jan. 19.
Staff writer Richard M. Barron contributed to this report.
Contact Amanda Lehmert at 373-7075 or email@example.com
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