by Leo Suarez

Downtown Raleigh Hotel Scene Being Looked at in Upcoming Study

The Hampton Inn in Glenwood South

The Hampton Inn in Glenwood South

During this week’s Raleigh City Council meeting, money was approved to go towards a Downtown Hotel Market Feasibility Study. The city’s press release sums it up.

Downtown Raleigh has changed dramatically since the last hotel market study for the area was completed in 2003. The rebirth of the center city has included a return of vehicular traffic to Fayetteville Street; the openings of the Raleigh Convention Center, City Plaza and Red Hat Amphitheater; and new quality housing, office, retail and dining establishments.

The City of Raleigh considers that these new developments warrant an updated hotel market analysis for Downtown. The City Council voted unanimously today to partner with the Greater Raleigh Chamber of Commerce, Greater Raleigh Convention and Visitors Bureau, and Downtown Raleigh Alliance on funding a new Downtown hotel market feasibility study. The City will contribute $20,000 toward the $55,000 study; the remaining $35,000 will come from the three partnering agencies.

The hotel market feasibility study for the Downtown area will include site analysis, a review of rooms and public space needed, hotel type and quality recommendation, impact on the Convention Center complex, and analysis of public/private partnerships existing in the industry.

In addition to funding the hotel study, the City of Raleigh, Chamber of Commerce, Convention and Visitors Bureau, and Downtown Raleigh Alliance will design a request-for-proposals (RFP) to recruit a study consultant and analyze the results and recommendations of the study. The City plans to work with representatives of the partnering agencies in forming a steering committee to develop the RFP and work with the selected consultant to complete the study.

The Downtown hotel market feasibility study is expected to begin in March. It will take approximately four months to complete the project.

*City Council Approves Downtown Hotel Market Feasibility Study

Outside of the actual buildings that the hotels are in, there hasn’t been much discussion yet on this topic so I thought it would be good to kickstart that a bit.

Let’s start with what we have so far:

That is a total of 1,127 currently active rooms within the generally accepted downtown Raleigh borders. An upcoming project to add to that is:

  • Residence Inn at about 600 South Salisbury Street, bringing approximately 150 rooms.

The Residence Inn is the only hotel project that I know of that has any real traction. That brings our total to about 1270 rooms.

Small, but growing, is the amount of Airbnb spaces in and around downtown Raleigh. The online space-rental service is rapidly growing across the country and a quick search for Raleigh shows some options in downtown.

I bring this up as the city is currently wrestling with how to properly regulate this service. From an N&O article:

The city won’t be punishing people who offer their homes for rent on Airbnb just yet, but some members of its governing council have dug in against the Internet-powered room-rental service.

*Raleigh City Council draws debate lines on Airbnb rentals

A debate on Airbnb in Raleigh could be its own blog post but you could argue that there are mixed messages going on here. For years, city council has said that more hotel rooms are needed in downtown Raleigh. Along comes an innovative service (we’re an innovative city right?) to offer more staying options for visitors and we’re stumbling over how to handle it?

It could just be as simple as a liability discussion really but I’m not an expert on this topic. Currently Airbnb options in downtown Raleigh make up less than 2% of the available room inventory from browsing the website.

The last hotel tidbit I want to mention is the historic Sir Walter Raleigh building at the corner of Fayetteville and Davie Streets. Opened first as a hotel in 1923, it was the premier hotel for visitors in Raleigh for decades before being converted to apartments in the 1970s.

Talk of converting it back to a hotel is not new and there is a 2008 Triangle Business Journal article that describes a failed attempt at doing this:

Hopes of returning the historic Sir Walter Hotel in downtown Raleigh back to its original splendor as a showcase inn have fizzled out.

…..

Alas, the project was contingent on HUD agreeing to transfer the rent subsidy vouchers from the Sir Walter to Saint Aug’s. Despite a letter-writing and lobbying campaign by Raleigh leaders and several members of North Carolina congressional delegation, HUD never approved the swap.

*Sir Walter Hotel revival dies as feds block shift

I imagine the Sir Walter could be a very unique boutique hotel, something entirely new in downtown Raleigh at this point. The hotel market study could shed some light if downtown has enough pull to sustain a boutique hotel compared to a national brand.

Building a new hotel is probably much easier than renovating an existing one, like the Sir Walter Raleigh, but the end product could probably not be matched by any new construction for years to come if done right.

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17 Comments

  1. I love the idea of turning the Sir Walter building back into a boutique hotel – only issue would be where to place all the current residents: the senior citizens! Well, what if John Kane (North Hills + new Stanhope apts on Hillsborough) bought it out, giving the seniors incentives to move into his new senior living apartment center he just built in N. Hills! You can’t just put notices on everyone’s door saying “this building is being renovated into a hotel, you must vacate within the next 2 months” that’d be a lawsuit waiting to happen- but if you were to buy it out and say “we’re going to help you find a new senior living center and here’s a couple extra bucks” – it’d be expensive but it’d be the best way to do it. And it really is important for the future of Raleigh’s growth. It just doesn’t fit in on Fayetteville St anymore.

  3. You could move them to…. anywhere else in Raleigh, instead of a prime (and noisy) part of downtown. I believe they’re on government assistance or something, so in reality they could be moved anywhere that accommodates that. I doubt the insanely expensive place in North Hills would be welcoming them, though.

    I don’t mean we should push old people out. But as Jake points out, this isn’t where they want to be, and it isn’t where the city needs them to be. So maybe looking for a phased withdrawal wouldn’t be a bad compromise.

  4. In my opinion, the number of high end hotels need to increase.. There should be a Ritz Carlton or Four Seasons cause there are those kinds of travelers… In addition, reasonable hotels should be included.. 4 point, HI Express, etc.. And at least one resort hotel.. A Gaylord would be awesome.. As would a Kimpton hotel which is very pet friendly…

  5. Regarding the elderly on assisted living, it’s not just on Fayetteville Street. There’s also Glenwood Towers smack dab in the middle of Glenwood South. These locations were established because they were cheap and nobody wanted to be in the downtown area. Clearly that tide has changed and it now it seems like the residents want a dead downtown again. But, I’ll tell you, if they move them somewhere suburban they’ll probably bitch about not being convenient. I suspect that it’s a case of having ones cake and eating it too.

  6. Jeff – good point on the N. Hills senior living complex not being welcoming/affordable to assisted living seniors – didn’t think about that. But still, you get the whole “phased withdrawal” idea which was my basic premise.

    John – another good point about the Glenwood Towers! That building is extremely ugly, but with a little renovation/redecorating, it could make for a worthy boutique hotel as well!

  7. We definitely need more hotel rooms. The elderly housing might work better elsewhere but honestly moving them elsewhere might result in the worst kind of gentrification. Partnering with Kane to build in North Hills or with another developer to build in a walkable and accessible neighborhood would be great, but also is not very likely.

    And while a boutique hotel would be nice, some other kind of restricted housing would also help maintain or improve diversity of downtown neighborhoods.

  8. Since you mention Sir Walter, I think it’s also worth noting that the historic Velvet Cloak is sitting empty, rotting away. A good developer taking over that property and bringing it back to its old glory days would help the downtown hotel supply significantly. This is a pretty good opportunity I would think.

  9. The need for more rooms is clear. The need for city amenities to enhance the guest experience when visiting Raleigh is just as clear. A family cannot currently walk from the train station to the convention center with any dignity(picture wheely suitcases rolling over the tracks on Cabarrus with no sidewalks). Nowhere to get a bagel. Nowhere to get those forgotten toiletries outside of CVS’s banking hours. The velvet cloak could make nice micro apt studios. The exterior “motel” style entrance door would be difficult to work with for a hotel. However, it feels like decades of lawsuits before we could see any progress over there.

  11. Not to get too far off topic, but yeah.. what is up with CVS’s hours? It’s the only real normal retail downtown, and I’ve never once been able to go inside in the 6 years being here. Wouldn’t people want at least beer, snacks, etc on weekends or evenings?

  12. Velvet Cloak is going through a legal eviction process to evict the last remaining “squatters” that purchased units that had been turned into apartments back in 2007. It was a stupid decision by the owners. not sure that they were thinking so now they have to go through a legal process to push the 1-2 remaining “owners” out. It’s frankly pretty shitty for the unit owners. The building owners are pretty much douchebags for how they structured these deals and are now strong arming the last couple tenants out.

    This said, when you look at the property from a “what’s best for the City” perspective, this has to be done. Supposedly, several developers have expressed interest in the site to the point where the current majority owners have a “buyer” on the hook. No indication of whether future plans call for a tear down or restoration. The legal eviction/foreclosure process on the last unit owner or two has to play itself out, some time in early 2015, is my understanding.

  13. Uncle Jesse: I’m completely with you – really bad situation, but like you said it must be done.

    Jeff^^: I’ve been saying that about the dTown CVS since I moved here! What time does it close, 4:00?? Haha – I imagine within a few years, they will have to go 24hrs. On the topic- they would really benefit from re-arranging the store and letting the windows be, you know, windows that you can see into the whole store from the outside.

  14. Interesting how the discussion morphed from adding a new hotel to displacing the elderly population.

    It is interesting that everybody cites a need for more hotel rooms. I know that is true from the perspective of the municipal leaders, who point out that many conventions pass Raleigh by because we are unable to provide enough rooms for certain groups. Of course, adding the rooms does not necessarily mean that the conventions will come here though it clearly would elevate Raleigh as an option.

    However, I don’t believe that occupancy and room rates in the existing market justify addition of new rooms in an of themselves. Rates here are relatively modest and occupancy levels are so so.

    So, it is not really a “no brainer” decision, but rather, one that is fraught with risk. If new rooms are added to inventory and the convention center fails to attract new business, then all we have accomplished is the undermining of financial sustainability of the existing hotels.

    I also think that downtown should try an attract a developer to put up some market rate senior housing in downtown. Yes, Raleigh has a future as a high tech employment center attractive to young people. But it is also a great place to retire. Its airport is convenient and links well to other (grand children) locations. It has excellent medical resources and there is abundant cultural life as a result of the Universities. It would not surprise me if the next large “for sale” multi-family project is a condominium catering to 55+ buyers.

  15. Good points, Tom. A senior living condominium development downtown might not even require much parking either. I’d like to see the occupancy rates for hotels across Wake County. My impression is that while there are a lot of rooms, they’re too spread out. For organizers, its hard to say that there’s 1,000 more rooms at Crabtree and 500 more near Six Forks and Wake Forest Road when there’s not an easy connection between those areas an the convention center.

  16. There was only one vote in yesterday’s Planning Commission Meeting against the 20 story rezoning request @ 301 Hillsborough St , so the Planning Commission does recommend the lot for a high rise. The city council plans voting on this Tuesday March 3rd. I have e-mailed the council on this & I hope to be able to attend Tuesday’s Meeting. If everyone will please also e-mail the council. My only concern is that a ton of residents from The Hue & The Dawson will be there showing strong support against a 20 story project. Dwight Nipper

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