Central Mass. Communities Make Room For New Hotels
Whether it be new hotels that have been in the works for several weeks or several years, or changes at existing sites, parts of Central Massachusetts will see hospitality industry changes in the months ahead.
According to the Massachusetts Lodging Association, occupancy rates for Central Massachusetts last year were 59.6 percent. That's compared to 66.4 percent for the state and 61.4 percent nationwide. But developers in the area are betting that there are businesses and tourists that have unmet hotel needs. There are new hotels planned for Sturbridge and Marlborough, and renovations and new developments slated for Worcester. Here's a breakdown of what's expected in those communities.
WORCESTER
Most of the recent hotel buzz belongs to Worcester. After years of city and business leaders saying the city lacks an adequate number of hotel rooms following the loss of the Crowne Plaza and its 243 rooms in 2010, it's possible that two replacements could be on their way in the downtown area.
One is a four-star facility Mass Gaming and Entertainment LLC (MGE) wants to build within the downtown CitySquare development as part of a deal that would bring the state's only slots parlor to the city.
In meetings with city councilors last month, representatives from MGE — a subsidiary of Chicago-based Rush Street Gaming — and Cambridge-based hotel developer Carpenter & Co. said they want to invest $40 million in a 160-room hotel. The developers said the hotel would be comparable to Carpenter's luxury Charles Hotel in Harvard Square in Cambridge.
But the hotel is tied to the slots parlor proposal, which is going up against three others in the state for the one slots license approved as part of the state's 2011 expanded gaming legislation. The city council and City Manager Michael V. O'Brien would have to approve MGE's plan before voters decide its fate in a ballot referendum. If they approve it, the proposal would also have to be chosen by the state's gaming commission.
Meanwhile, O'Brien and city Chief Development Officer Timothy McGourthy are urging councilors to approve a tax deal for a five-story, 100-room Hampton Inn and Suites planned for 65 Prescott St., adjacent to the Courtyard by Marriott — and owned by the same company — near Gateway Park.
SXC Prescott Street Hotel LLC said it expects the project to cost $11.2 million, and it would create 30 new, permanent jobs in 2014. It will have a swimming pool, fitness room and a lounge with food, plus a business center and meeting room.
McGourthy proposed a tax increment financing (TIF) agreement for the project, giving the firm varying percentages of tax exemptions over seven years that will save SXC $1 million.
However, city councilors have expressed concerns over the TIF, ranging from whether the company really needs it, to the fact that SXC said most of the new jobs would only pay minimum wage. Last week, the council's three-member Economic Development Committee unanimously voted to deny the TIF request, which goes before the full council April 23.
Construction on the project, which McGourthy said is contingent on the TIF, is slated to begin in the summer and completed within a year.
On the more immediate front are renovations to the Hotel Worcester that will culminate in the rebranding of the hotel — which until last year carried the Hampton Inn flag — as a Holiday Inn Express within a few months.
The hotel's general manager, Jonathan Buck, said Atlanta-based InterContinental Hotels Group, which owns the property, is spending more than $1 million on renovations beginning this month.
The building will be renovated inside and out with guestrooms getting complete makeovers and upgrades. The exterior will get new paint and stone masonry on the front.
“It'll be as close to a brand new hotel as possible,” Buck said.
STURBRIDGE
Jayesh Patel hopes to break ground on a new hotel in Sturbridge this summer.
In 2009, Patel purchased land at 21 New Boston Rd. — the former American Motor Lodge — and received town approval for a Holiday Inn Express and a restaurant. But Patel said the bad economy and difficulty getting funding caused him to delay his plans.
“Now we can refinance and (building the hotel will) have less of an impact financially. The cash flow and everything has been improving,” he said. “The economy seems to be getting into the right direction.”
Work, such as the demolition of the long-abandoned lodge, is underway and Patel is seeking a zoning adjustment that would change the parcel from residential and commercial to all commercial, giving him the space to build what he wants. Under the original plans, the residential portion of the property would be empty, but Patel wants to put a bank there. His request will go before town meeting in June.
Patel said he's planning a three-story, 78-unit, 45,000-square-foot hotel. A brand is yet to be determined, though Patel said he's planning on something “high end,” such as a Marriot or Fairfield Inn. He already owns the Days Inn and a Super 8 Motel in Sturbridge, and a Hampton Inn in Auburn.
The new site would also have a restaurant, with the three components creating about 75 full-time permanent jobs and at least 50 construction jobs for about a year.
“It will be an awesome project,” Patel said, adding that, “It will be a landmark building for Sturbridge.” He's also planning a fitness center, pool, small bar and a meeting facility.
Meanwhile, Patel is also still dealing with the aftermath of the tornado that ripped through the area in June 2011. It destroyed his Days Inn on Route 131 that has yet to be reopened. Patel said disputes with his insurance company are delaying the process.
“Once we get funding, we'll rebuild,” he said.
MARLBOROUGH
Plans for a 110-acre mixed-use development fronting the west side of Interstate 495 that will include office, retail, housing and hotel space are underway.
Joseph Zink, president and CEO of Atlantic Management, said his Framingham-based firm is the master developer of the plan that includes the 750,000-square-foot former Hewlett-Packard facility, which Quest Diagnostics will move into.
He said Atlantic is in talks with three potential hotel developers who are all projecting a 125-room facility that Zink expects will be mid-range in the market. He said a deal with a developer is likely within 90 days.
“I think people feel much more confident about the hotel market now only because the office market is doing as well as it is right now,” he said. “In the past year, there's been a lot of positive office activity in the Marlborough market which translates to hotel needs. When the vacancy (rates) in the offices are high, usually the hotels don't do as well.”
He cited moves into the city by TJX Cos., Quest and Boston Scientific as evidence of the growing demand.
“There's no other hotel at that intersection, and there's approximately 3 million square feet (of office space) in that area so we think it can support a hotel,” Zink said.
He said the options for how the hotel is built vary and could have a developer buying the property from Atlantic, or Atlantic building the facility for a management firm.
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