Lancaster hotel project aspires to catch CRIZ momentum
John Meeder makes no bones about it: He's eager to obtain City Revitalization and Improvement Zone funds for The Hotel Lancaster, which opened in November in place of the long-troubled Hotel Brunswick.
But whether the CRIZ Authority ends up giving him part of the newly authorized program's pot of money isn't what the developer talks about most. Instead, when asked what prompted him to take on the long-ailing hotel facility, Meeder nearly rhapsodizes on Lancaster's trajectory.
"Lancaster city has become itself a destination," Meeder says. "Great things are happening right in this local area."
He mentions the celebrated array of restaurants, the art-filled block known as Gallery Row, the venerable Fulton Theatre and the newer education-associated entertainment venues — The Ware Center, which has bustled up a storm in the past few years, and The Trust Performing Arts Center, which Lancaster Bible College recently opened in the former Lancaster Quilt and Textile Museum building.
Then there are the projects his company, Meeder Development Corp., has done in three decades, working primarily in Lancaster County and largely in the city. Notable among them are Historic East Side Suites, Christian Street Court and Center City Lofts.
And then there's the Lancaster County Convention Center and Lancaster Marriott at Penn Square, the $178 million public-private entity that draws events to the city and support from the county hotel tax. It's close to The Hotel Lancaster, it has about 300 rooms and its troubled finances have long been a flashpoint in local economic discussions.
"We're supporting them, they're supporting us," Meeder says, speaking not of finances but of cooperation. "Their management has been through here, and we're going to have their whole sales staff through here soon."
That symbiotic vision is not unique to Meeder.
"I think there's a consensus that the city needs another hotel at a different price point than the Marriott," says Randy Patterson, the city's director of economic development and neighborhood revitalization.
Joel Cliff, spokesman for the Pennsylvania Dutch Convention and Visitors Bureau, says The Hotel Lancaster will add significant capacity to the downtown hotel market, allowing it to actively court more mid-size meetings, conventions and events that require 300 to 500 room nights per night within walking distance of each other.
"In light of this added capacity and its geographic location, we expect that increased demand will follow," Cliff says, noting that both aspects fit well with the needs the bureau has heard from potential clients.
The Hotel Brunswick was built in Lancaster Square, Meeder says, as part of what was supposed to be an urban renewal project in the late 1960s. But it flopped.
"One of the anchors was the Hess's department store, which was the building on the other end of the block that is currently referred to as the Bulova building," Meeder says. "Within a very short period of time, one to two years after Hess's department store opened, Park City opened, and they just sucked the lifeblood out of it."
Other parts of the project similarly foundered, Meeder says, and consequently the activity that was supposed to provide the hotel's business wasn't there. In the '80s and '90s, the hotel got a lot of government training contracts but then those, too, withered, and unsurprisingly the business declined, accumulating a chequered history as it passed through multiple hands.
The hotel spent much of 2013 closed, Meeder says. He and three partners — John Thomas, Lori Herr and Sam Wilsker — stepped in Aug. 1 and spent three months renovating the lobby and the ninth floor, then opened.
The top floors were in the best shape, so they're working their way down; they now have 66 of the building's total 221 guest rooms open and are racing to get the seventh floor ready because the 2014 Martin Luther King Kickoff Classic volleyball event starting Jan. 17 is gobbling up all available hotel rooms in a wide radius.
One of the event's venues this year is Spooky Nook Sports, the East Hempfield Township facility that opened in the summer and is the nation's largest indoor sports complex.
"They're going to put some hotels up, but they can't put up enough hotels for their needs," Meeder says, citing The Hotel Lancaster's 15-minute distance from Spooky Nook as another major draw. "That means that people who are coming to Spooky Nook can either stay in the middle of a cornfield or someplace else out in the country, or they can be right downtown and enjoy all that Lancaster city has to offer."
So far, business has been not record-beating but about as expected, Meeder says. The partners have invested more than $500,000 and hope to get it operating profitably and finalize their purchase this year, then have the whole facility up and running in the next year or two. All told, the project is estimated at $15.8 million.
The CRIZ factor
Meeder's vision for The Hotel Lancaster is just one facet of the changes city leaders hope CRIZ will bring to Lancaster. The brand-new state program is intended to leverage anticipated taxes from development into millions in capital for that development. Lancaster was one of two cities selected for it at the end of 2013.
Although The Hotel Lancaster and several other projects were listed as proposed Phase 1 projects in the CRIZ application, they're not guaranteed funding. The CRIZ Authority will spend much of this year working through initial setup of the program and then determining allocations.
"There's a lot of worthy projects that are going to go from can't to can," says Bob Shoemaker, president and CEO of Lancaster City Alliance. "We've had way too much real estate sitting idly by with no real chance for redevelopment, just because of cost structure to get a project launched."
Patterson uses the phrase "level the playing field of cost vs. revenue."
"When you look at our lease rates today and construction costs and development costs, they don't match up," he says. "That's part of the reason the Bulova building has been sitting there that long. Being able to make those numbers work is what's critical to finally fill that gap and move those projects forward. That's the exciting part of the CRIZ."
That said, Lancaster Mayor Rick Gray stresses that to avoid the fate of the effort that resulted in the building of The Hotel Brunswick and the Bulova building, CRIZ is going to be heavy on the long-term view.
"If we learned anything from Lancaster Square, it's that you don't go ahead just because something is current," Gray says. "You hold out for the best use and look forward 20 years."