Downtown Charlottesville sees hotel boom

Hotel Boom Photo: Staff photo Hotel Boom Photo: Staff photo

Between the Corner and downtown Charlottesville, five hotel projects are in the works—and that doesn’t include the recently opened Residence Inn on the corner of West Main Street and Ridge-McIntire Road, nor Graduate Charlottesville, which opened last year.

City and tourism officials say this hotel-building frenzy is an economic windfall for the area and provides much-needed supply. Despite that, some are skeptical the area can support so many hotels, particularly during the week, and they are concerned the local landscape will be haunted by more skeletal projects like the still-incomplete Landmark.

“In general, I think that’s too many to succeed in a part of town already chock-a-block with hotels,” says close-to-downtown resident Antoinette Roades, citing the Omni, Hampton Inn, Courtyard Marriott and Graduate.

“We’re very happy about the additional inventory coming into the market,” says Bri Warner, director of marketing and sales at the Charlottesville Albemarle Convention & Visitors Bureau. “During certain times of the year, it’s impossible to provide proposals to clients looking for a block of rooms.”

Thanks to the Charlottesville area becoming a wedding destination, during the prime marrying months of May or October couples can find themselves out of luck and looking at having to stay in Waynesboro, Staunton or Richmond. “We want them to be able to stay in Charlottesville,” says Warner.

But it’s not just the wedding biz that’s filling Charlottesville and Albemarle’s 3,700 rooms. The University of Virginia is a major driver with education, sports and medical visitors. “We’ve got a lot of niche markets,” says visitors bureau Executive Director Kurt Burkhart.

Add in conferences—despite the area’s lack of a convention center—corporate and leisure travel, and the area boasts an astounding 70 to 71 percent occupancy rate, says Burkhart.

Compare that with the statewide average of 47 percent occupancy and $85 a night. Here in 2016, even during the traditionally slow first quarter, upscale hotels between Boars Head and downtown were 65 percent occupied with an average nightly rate of $145, according to STR Global, which tracks the hotel industry.

Tourism spending brings in an eye-popping half-billion dollars a year, reports the Virginia Tourism Corporation for 2014. And that’s just Charlottesville and Albemarle. The industry supports 5,400 jobs in the area and a $105 million payroll.

“All numbers point to a healthy economy,” says Burkhart. “We’ve been on an upward trajectory, and 2015 was better than 2014.”

Photo: Carr City Centers, Matteus Frankovich, Southern Development

The nice thing about visitors is that they leave their money, pay the lodging tax and go home, say those in the business. “Tourism is clean,” says Burkhart. “You don’t have to build schools. Local residents become the beneficiaries of tourism.”

Some have knocked hospitality jobs for being lower paid, but Hollie Lee, chief of workforce development strategies in the city’s economic development office, says hotel jobs are not in the same category as fast-food employment.

“We’re seeing competitive rates,” she says. For instance, while housekeeping may normally be an $8-an-hour job, she’s seeing them in the $9-, $10- and $11-an-hour range.

“I think that’s pretty reasonable for someone who doesn’t have a lot of education and skills,” she says. For someone with a GED, “You can start at a lower level, get on-the-job training and move up,” which is the path some hotel general managers have taken, she says. The industry offers a lot of cross-training, which “makes you more valuable,” she says.

In the past two years, three new area hotels each have hired between 40 and 60 employees, says Lee.

But not everyone is buying into the boosterism of the hospitality industry. City Councilor Bob Fenwick is concerned about how quickly hotel projects are lining up in the downtown area and worries they could cause the 70 percent occupancy rate to plummet.

He cites the example of an Elton John concert that packed the town, and hotel rooms couldn’t be found. “That situation was publicized as an indication we need more hotel rooms—as if we have an Elton John concert or other big name every week,” says Fenwick.

Once the new projects come on board, he fears oversupply and downtown becoming a “hotel alley,” with the Landmark as a grim reminder of what happens when financing dries up.

For Charlottesville’s director of economic development, the current building boom is part of a cycle. “Eight years ago, no one was building anything,” says Chris Engel. And while the current cycle will slow, “I think we’ll see older properties improve or convert, like the old Quality Inn that’s now the Country Inn and Suites.”

One reason for the downtown area boom: Visitors want to be within walking distance of the Downtown Mall. That’s what Vik Patel with Baywood Hotels, a development company out of Greenbelt, Maryland, that is working on two of the hotel projects, discovered in his company’s research.

Another trend with several of the new hostelries like the Residence Inn is to skip including restaurants because of the abundance of dining options downtown.

Here’s who’s not freaked out by the new hotels—and competition: the Omni, which a couple of sources say boasts a 91 percent occupancy rate. Sales and Marketing Director Jennifer Mayo would not confirm that number, allowing only that the west-end-of-the-mall hotel’s occupancy was “very high.”

Says Mayo, “Worried is not in our vocabulary.”

The projects

Autograph Hotel

1106 W. Main St.

Developer: Carr City Centers, Washington, D.C.

Number of rooms: 150

Development status: Okayed by Board of Architectural Review March 25; groundbreaking by early summer.

Carr owns the Willard Hotel in Washington, and recently closed on the former Studio Art Shop property for $4 million, says its former owner John Bartelt. The Autograph will have a “signature restaurant” on the ground floor, 2.5 levels of parking, hidden by “an attractive architectural” screen, fourth floor meeting rooms and guest rooms above that in a 101-foot, 10-story tower, says Mike Wilson, Carr senior VP. “We want to provide a gateway between the university and downtown,” he says, one that is a luxurious, upscale boutique.

For years, Bartelt refused to sell his property at 11th Street to UVA for fear West Main would be pedestrian unfriendly, with deserted office buildings after 5pm. “Having a hotel there is better than what it could have been,” he says.

Home2 Suites by Hilton

201 Monticello Ave.

Developer: Baywood Hotels, Greenbelt, Maryland

Number of rooms: 113 rooms, four stories

Development status: Site plan under review; groundbreaking later this year.

Baywood is a development company that does only hotels, says senior VP Vik Patel, and the Coran Capshaw-owned former Portico Church location’s “proximity to the Downtown Mall attracted us to this site,” he says. Home2 Suites by Hilton are extended-stay hotels with a “boutique-y feel,” says Patel. While this one will have a fitness center and indoor pool, it won’t have a restaurant or a bar. And it will compete with Residence Inn for corporate clients, those in town because of UVA Medical Center and wedding parties. “I think we’ll be a great addition to that street corner,” he says.

Glass Building site

Garrett and Fourth streets

Owner: Oliver Kuttner

Number of rooms: 120-150

Development status: Kuttner expects site plan approval by August; city planner Brian Haluska said it could be months if not years.

Oliver Kuttner wants to put a hotel on top of a parking deck on his Garrett Street property. Photo: Elli Williams

Kuttner is one of the most visionary builders around, with projects like the Tree House on the Glass Building site, but his innovations often are not embraced by the city, which gave his plan to put micro apartments in an affordable housing-strapped town a cold reception. He’s in talks with Baywood Hotels, and Patel confirms that, but says it’s premature to comment further. Kuttner says he can do by-right development, and envisions a 350-space parking structure with a hotel on top, along with an office and residential component on the site that’s “essentially two city blocks,” he says. “The demand for hotels is there for downtown.” So is the demand for parking with the Water Street Garage at capacity. “A hotel with parking that’s open to the public during the day has its advantages,” says Kuttner.

Fairfield Inn & Suites

Ridge Street and Cherry Avenue

Developer: Southern Development

Number of rooms: 100-plus

Development status: City approvals complete; groundbreaking this summer.

Of all the current hotel projects, none has been more actively opposed than this one. Southern Development’s Charlie Armstrong has worked on the William Taylor Plaza for more than a decade. Neighbors resisted the planned unit development on the corner of the historic African-American neighborhood amid concerns a 19th-century cemetery is on the site, and submitted a petition with more than 500 signatures objecting to the Fairfield Inn last summer. Now that approvals are in place, Armstrong is selling the corner to Marriott, which owns the Fairfield chain, and he is getting ready to work on the commercial and residential phase 2 of the plaza.

The Dewberry

201 E. Water St.

Developer: John Dewberry

Number of rooms: Approximately 100

Development status: Depends on when the Dewberry Charleston is completed.

Atlanta’s John Dewberry bought the Landmark in 2012. Four years later, he may be getting around to putting a hotel there. Photo: Courtesy subject
Atlanta’s John Dewberry bought the Landmark in 2012. Four years later, he may be getting around to putting a hotel there. Photo: Courtesy subject

If the Fairfield is the most controversial hotel project, the skeletal structure of the Landmark Hotel looming over the Downtown Mall for more than seven years is the most ridiculed. The glowing collaboration between CNET founder Halsey Minor and Ice Park/Regal Cinema developer Lee Danielson to build a nine-story luxury hotel in 2008 quickly deteriorated and construction stopped in January 2009. Dewberry picked up the blighted property in 2012 and said he’d start on it as soon as he finished his hotel in Charleston. Four years later, in January, City Council approved a resolution to take action that included getting an appraisal in the event of public acquisition through condemnation. Camp Dewberry is upbeat that won’t happen because the Charleston hotel finally is supposed to open in mid-June. “We’re excited,” says Dewberry representative Eliza Heyward. “We met with the mayor and city officials. We’re getting the ball rolling.” One other problem facing the project and possibly its financing is that the downtown hotel no longer has access to parking in the Water Street Garage. “I’m sure it’s something John is working on,” says Heyward.

Recently opened

Residence Inn

315 W. Main St.

Number of rooms: 124 suites

The Marriott property opened its doors March 28, and in its first month has had a 65 percent occupancy, compared to the usual 30 percent for new hotels, says Regina Dodd, director of sales. The $189-and-up rooms are all suites, including studios (around $349 on weekends), one and two bedrooms, all with kitchens that cater toward the extended-stay visitor. “There’s not another hotel in the city like this one,” says Dodd. Unlike most Residence Inns, this one has a bar, along with a fitness center, pool and three meeting rooms. Dodd is not worried about midweek occupancy because of UVA academic and medical visitors, corporate and government travelers, new technology companies and vineyard and wedding tourism. Even with the competition targeting the Residence Inn, she sees demand “continuing to grow.”

The Townsman

211 W. Main St.

Number of rooms: 4

The Townsman is not your typical hotel, says manager Jeremy Fields, and he describes it as a hybrid. “People want to live like a local when they come to town and get out of the hotel,” he says. With Mudhouse next door and lots of restaurants nearby, visitors can walk to everything they need. The hotel is ideal for groups that want to book all four rooms, but individual rooms are available, too. Guests reserve on the website, receive an e-mail with a personal access code, arrive in town and head directly to their deluxe, Kenny Ball-designed rooms with no interactions with staff, he says. The Townsman had a soft, word-of-mouth opening in April. Fields says its rates will be competitive and in the $150-$170 range during the week.

Graduate Charlottesville

1309 W. Main St.

Number of rooms: 134

When Graduate Charlottesville opened last year on the site of the Red Roof Inn, it didn’t really add to the hotel inventory. And with its primo location on the Corner across from UVA, some of the weekend rates for the end of May and early June are in the $389-$399 range, according to its website. “At the end of the day, the increase in upscale hotels in Charlottesville is positive progress because it means tourism is up and people are looking for much more of an experiential stay,” says Graduate GM Yolunda Harrell. “I think that’s where Graduate Charlottesville shines.” For locals seeking to soak in the ambience once the students clear out, check out its rooftop restaurant and bar, which are scheduled to open mid-June.

City Councilor Bob Fenwick is concerned about how quickly hotel projects are lining up in the downtown area and he worries they could cause the 70 percent occupancy rate to plummet. Photo: Rammelkamp Foto
City Councilor Bob Fenwick is concerned about how quickly hotel projects are lining up in the downtown area and he worries they could cause the 70 percent occupancy rate to plummet. Photo: Rammelkamp Foto

Correction: The original story and map misplaced Oliver Kuttner’s planned hotel, which would be on the corner of Garrett and Fourth streets.