College Of Pharmacy To Buy Crowne Plaza Property
The Crowne Plaza Hotel in downtown Worcester will close in June and will be sold to the Massachusetts College of Pharmacy and Health Sciences for $16.8 million.
The MCPHS said it needs additional housing, academic space for anticipated new programs and parking in the city. Its enrollment is expected to top 1,000 students in the near future and double to about 2,000 over the next 10 years.
The sale is expected to close June 14.
MCPHS opened a $10 million academic center last September at the corner of Foster and Commercial Streets downtown, about four blocks from the Crowne Plaza. It purchased the 30,000-square-foot building in 2008. The college's main building is the across the street at 19 Foster St. MCPHS also has campuses in Boston and Manchester, N.H.
The MCPHS occupies about 180,000 square feet in downtown Worcester, much of which was previously vacant or run down warehouse and office space. The nonprofit college last year made a voluntary payment in lieu of taxes to the city.
With the Crowne Plaza buy, the college's investment in downtown Worcester totals $85 million.
The Crowne Plaza is currently being run by Driftwood Hospitality Management of North Palm Beach, Fla., which took over management of the property as a court-appointed receiver late last year after Lodgian, the hotel's owner, stopped making payments on a $16 million mortgage.
A Driftwood representative could not be reached for comment this morning.
As the economy soured, business and leisure travel took a swift downturn. Hotels in Worcester finished 2009 with an occupancy rate of 60.7 percent, a 2.4 percent decline from the prior year, according to Smith Travel Research. Hotel revenue in the city was $19.2 million, a 6.5 percent decline.
Mark Waxler, general manager of the Beechwood Hotel in Worcester, said the city simply had too many hotel rooms for all of them to make it through the recession. However, as the economy improves, the MCPHS buy will leave Worcester down 243 hotel rooms.
"The city will be okay. Other hotels will absorb a lot of the rooms for the time being, but when people start traveling again, you don't know what's going to happen," Waxler said.
Patrick Lynch, executive director of Destination Worcester, said the closing of the Crowne Plaza and its sale to the MCPHS could lead to new hotel construction in the city, but that may be years in the future.
"As the travel industry turns around, we will be a viable destination for a hotel developer to place a new property," Lynch said. But in an industry that has gone from relative stability to great volatility in the last 10 years, any prospective hotel developer must be prepared to "borrow based on what's in your bank account" rather than on reputation, Lynch said.
"They had been doing well booking business," Lynch said of the Crowne Plaza. "But they built up some debt that they were unable to overcome. That may go back to previous owners who held multiple properties."
Lodgian, the owner of the struggling hotel and meeting facility, fell behind on its $16.3 million mortgage, and late last year, the hotel was transferred to Wells Fargo Bank, Lodgian's lender.
Several members of Driftwood's management team were once part of Servico, the company that purchased the Worcester hotel in 1995 and converted it to a Crowne Plaza from a Marriott.
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