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COVER STORY, OCTOBER 2005
HOSPITALITY ACROSS THE NORTHEAST
Nicole Thompson
After several years of struggle in the Northeast with tourism down after September 11, 2001, and an over-supplied development pipeline right as the economy was taking a downward turn after the tech boom, the hospitality sector finally has both feet on the ground and is reaching to new heights with projects across the region. Fundamentals are looking good, and development is picking up. Northeast Real Estate Business spotlights several projects across the region, from Pennsylvania to New Paltz, New York, to Boston to New Jersey.
Courtyard by Marriott — Lancaster, Pennsylvania
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The Courtyard by Marriott in Lancaster, Pennsylvania.
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The new Courtyard by Marriott in Lancaster, Pennsylvania, was completed this summer after a year of construction. The 133-room and 83,821-square-foot hotel cost approximately $9.5 million, and features 600 square feet of meeting space, a restaurant, guest lounge, indoor pool with whirlpool spa, exercise room, a 24-hour convenience mart, guest laundry and on-site free parking for guests. Located at 1931 Hospitality Drive in Lancaster, the hotel was developed by High Hotels and High Associates. High Construction Company was the general contractor, with architectural services by Greenfield Architects and financing provided by Mercantile Safe Deposit & Trust Company. According to Frank McCabe, president of Lancaster-based High Hotels, the location was chosen for the market conditions. “Market conditions were right for an upscale, quality select-service hotel with appeal to both corporate and leisure guests,” McCabe says. “The hotel provides an additional amenity for business tenants of the 600-acre master planned business campus known as Greenfield Corporate Center.“ The market conditions for this property were good, but McCabe adds that they have been cautious not to enter an overbuilt market.
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A view of the dining area.
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The hotel also includes two pad sites for franchise restaurants. “Many new hotels are limited service properties, and characteristically they limit food service to just breakfast,” says Michel Gibeault, vice president of business development for High Construction Company. “Travelers typically do not want to travel a great distance, especially in an unfamiliar area after traveling all day or after a long day in meetings.” Other trends that Gibeault has noticed include a more home-like guestroom, upgraded linen packages with higher thread counts, curved shower curtain rods, free high-speed Internet connections (particularly wireless), open and comfortable lobbies, and a marketplace concept with convenience items. In a broader sense, construction costs have challenged new hotel development. “Construction inflation has the development world questioning the cost of new construction,” says Gibeault. “In an industry that relies heavily on crunching the numbers, developers are questioning whether the room rates will keep pace with the higher cost to construct. Existing hotels are on equal footing with any new projects, but they can better predict their cost of operations than a new development carrying the construction risk.” To ensure the success of projects, look tothe surrounding area. “Local growth is always a good precursor to new hotels coming in,” says Gibeault. “Also, developers look at the local business generators, such as corporate parks, offices, and tourism.”
The InterContinental — Boston
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The InterContinental — Boston
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When planning first began on The InterContinental Boston, the hospitality market was strong, but the bottom fell out with September 11, 2001, and the economic downturn after the tech boom. However, it was decided that the development of the 424-room luxury hotel would proceed as planned and that decision is now paying off, according to Lew Fader, vice president of operations for InterContinental Hotels and Resorts. The hotel, which overlooks the historic Boston Harbor, is expected to deliver in late summer 2006, and since the development pipeline in the area slowed since the market went down, The InterContinental is poised to take advantage of a rising market. “The Northeast is doing very well,” Fader says. “We're getting back to 2000 levels of room rates and occupancies. It's probably the strongest market in the United States, and you compare that to where we were in 2001 and 2002, when the commitment was made and the loan documents signed to build this hotel. It would have been very easy to say, let's wait for the economy to change. The cycle is such a long cycle, though, by the time you make the commitment, you get your contractors organized, you get the building up and running, the timing of this hotel couldn't be better. The market is lifting up, all the economics are making great sense, and we didn't compromise our design. The Boston market is great, the Northeast is wonderful, and there's room for more projects in the Northeast.” Located on a site that was used by Boston Edison for about 100 years, the $310 million hotel effectively has two front doors — the street entrance and the waterfront entrance. Designed to be Boston's upscale meeting and social event destination, the hotel will feature the full range of amenities that The InterContinental brand is known for. The closest downtown luxury hotel to Logan International Airport, the property is expected to draw business and group event travelers visiting the nearby Financial District and convention center and leisure guests looking for the height of luxury.
The hotel will not be limited to transient guests. Capitalizing on the trend toward joint hotel-condominium properties, The InterContinental Boston is the first North American hotel for the brand that also includes 130 luxury condos. Total size of the hotel is 730,000 square feet, with 440,000 square feet of that space for the hotel proper.
The hotel features three distinctive bar/lounge areas and a three-meal restaurant. One of the most exciting design aspects of the hotel is the waterfront promenade, lit by torches at night, that will be open to guests and the general public alike.
The owner and developer of the hotel is Extell Boston Harbor LLC. Howard Elkus of the Boston firm of Elkus/Mandredi is the architect and Brennan Beer Gorman Monk provided interior design services.
The Spa at Mohonk — New Paltz, New York
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The Mohonk Mountain House, pictured here, has recently added a 30,000-square-foot ultra-luxurious spa. The 136-year-old resort has made several other additions over the past decade, making sure to protect the environment and preserve the ambiance as the resort is expanded. The family-owned resort worked closely with architects Saratoga Associates on the design.
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The Mohonk Mountain House, set in the Shawangunk Mountains near New Paltz, New York, has been owned and operated by the Smiley family since resort founder Albert Smiley began operations in 1869. In recent years, the family has worked very closely with architectural firm Saratoga Associates on several projects to expand the historic resort.
The most recent addition to the Hudson Valley resort is a $13 million, 30,000-square-foot multi-level holistic spa. Highly energy efficient, the design of the spa took very seriously the Smiley family's desire to impact the site and the environment as little as possible (see sidebar, “Environmental Considerations for the Spa”). Also high on the list of priorities was ensuring that the new spa looked like a structure that had been there as long as the resort had, from the materials used in the construction to the fit-out of the interior.
In addition to the 16 treatment rooms themselves, the building features an outdoor stone terrace and six-person all-season mineral pool, full-sevice salon, sauna and steam rooms, and fitness equipment. With a 60-foot pool enclosed in a wood and glazed-glass structure in addition to the two 80-feet long glass enclosed verandas that are connected by a solarium, the spa brings the beauty of the outside view from the ridge it sits on inside to guests.
“As architects for this 136-year-old, historic 2,200-acre resort, our mandate was to ensure that the spa's ambiance was consistent with the physically and emotionally comfortable style of the original buildings, and at the same time that it embraced the natural landscape of the setting so as to make it both aesthetically appealing and therapeutically restorative,” says Michael Rudden, senior principal with Saratoga Associates. “We shared the fourth-generation Smiley family's conviction and commitment to ‘keeping Mohonk the same, only better' and worked collaboratively with the family leadership to create healing spaces that are spiritually uplifting — the best integration of timeless past and luxurious present, exactly what a 21st-century spa in a historic setting should be.”
According to Albert Smiley, president of Mohonk Mountain House and direct descendant of founder Albert Smiley, “We are thrilled with our new spa. It embodies all of the qualities we envisioned from the outset and its geothermal system, green roof, and energy efficient lighting and plumbing systems are features that make both economic and aesthetic sense. As co-stewards of our property, Saratoga understood that we needed a spa extension that would be architecturally consistent with the original Mountain House, yet would embrace the latest technology when it came to conserving energy and harnessing natural resources at the operational level.”
Environmental Considerations for the Spa
• A ground-source heat pump system with 48 subterranean, 480-foot deep ground heat exchanger with pipes located beneath restored croquet courts. The year-round supply of 50-degree coolant is run through an exchanger to cool down or heat up the building's forced air HVAC system. Could represent saving of approximately $20,000 to $25,000 per year in annual operating costs.
• Low-flow and sensor-activated faucets and fixtures to reduce water consumption.
• A biological filtering system, following New York state's updated Department of Environmental Protection stormwater regulations. System is composed of treatment sedimentation tanks 6 feet in diameter, buried beneath wetland plants growing in a wetland substrate comprised of fine stone.
• The green roof is a 2,000-foot terrace at the fitness level consisting of pre-cast concrete decking. Roof contains an 8-inch planting bed roof and a specialized soil mixture supports growth of shallow root structure plants, grasses, herbs, mosses, and ground cover, many of which are medicinal and will be used in spa treatments.
• Sustainable materials were used throughout, including ceiling tiles manufactured from post-industrial recycled material and the heavy timber for pool harvested through use of helicopters from steep slope areas of the Western Rockies to avoid construction of new roads for lumber.
• Prevalent usage of natural materials, including recycled stone — the spa wing was carved out of the same natural stone used in the main house. More than 1,176 tons of granite-like Shawangunk Ridge stone was removed from the building site, allowing the three-level building to nestle into the hillside and thus appear as a series of one- and two-story structures. More than 600 tons of this stone was recycled into stone veneer, stone fireplaces and chimney, and stone retaining walls, and more than 200 tons was crushed on site to provide subsurface fill and gravel paving.
• Consistent use of local artisans when available
• The spa also uses several recycled artifacts from the resort. The architects and interior designers scoured the resort's historic horse barn and selected several antique pieces for the spa, including several oak fireplace mantles and oak dressers and tables; the hotel's circa-1920s 10-foot wooden former lobby reception desk, modified to function as the front desk for the fitness level; and a historic wooden resort canoe dating back to the late 1800's will be hung in the pool building.
Sheraton Meadowlands — East Rutherford, New Jersey
Located just 3 miles from Manhattan at 2 Meadowlands Plaza in East Rutherford, New Jersey, the 275,000-square-foot Sheraton Meadowlands has 427 guestrooms and one of the largest ballrooms in New Jersey. The Buccini/Pollin Group, which is based in Washington, D.C., and Wilmington, Delaware, acquired the hotel in early September 2005 for approximately $55 million and has plans to spend $16 million on a significant renovation project. Buccini/Pollin is currently expanding its footprint on the Eastern seaboard, and this is the developer's first New York City metro area location.
Dave Pollin, president of Buccini/Pollin, notes that they expect to fill the hotel with a 50/50 mix of business and leisure travelers, with most of the leisure category stemming from events at the nearby Meadowlands sports complex and New York City tourism.
Driving the development of this project is the upside opportunity that the property presents. “We purchased the hotel below replacement cost — approximately 50 percent,” Pollin says, “and the location is 3 miles from Manhattan, where the hotel market is very strong and supply is being reduced due to condo conversion of hotels. The large size of asset allows us greater upside and a value-added opportunity — we specialize in hotel development and renovation, which this hotel certainly needs. We are believers in the continued rebirth of the Sheraton brand and Starwood overall.”
Pollin also notes that good hotel acquisition opportunities are hard to find in the Northeast. “Well-located land for new development is very expensive and difficult to entitle if it exists at all,” he adds.
The Sheraton Meadowlands also features an indoor pool, a business center, 475 parking spaces, a bistro, a sports lounge and more than 25,000 square feet of function space.
BBGM is the architect of the project, and financing is provided by Anglo Irish.
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