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Hotel Seagate to be demolished; Park Inn Hotel rehab planned

In a major shift in development plans for downtown Toledo, the crumbling skeleton of the 19-story Hotel Seagate on Summit Street that was to be renovated this year now will be torn down, and the nearby Park Inn Hotel will be renovated starting later this year with completion sometime in early 2022.

The $64.5 million Park Inn project will be funded through a newly-formed public-private partnership led by the Lucas County commissioners, who also will go forward with earlier plans to add a ballroom to the adjoining SeaGate Convention Centre and move the center’s parking garage entrance from Summit Street to Monroe Street.

The change in plans will save Lucas County nearly $30 million, but delays mean that the convention center and a newly-renovated hotel will not be ready for the Solheim Cup that, as of now, is set to be held in Toledo at the Inverness Country Club in August, 2021.

All of the new plans will be announced Tuesday at the regular meeting of the county commissioners.

Under the public-private partnership that includes the county, developer Frank Kass of Continental Real Estate Co. of Columbus, and Stephen Schwartz of First Hospitality Group, the 33-year old Park Inn, which is now closed, will be converted into dual Hilton brand hotels with a combined total of 309 rooms.

One will be a Hilton Garden Inn with 216 rooms, the other a Hilton Homewood Suites with 93 rooms. Also planned is a 120-seat Wahlburgers restaurant.

Mr. Kass’ company will do the renovation, which should start in the fourth quarter and be completed by the spring of 2022. First Hospitality, which owns and operates the downtown Renaissance Hotel, will run the two Hilton properties.

The county will invest $35 million through the Lucas County Economic Development Corp. for the redevelopment. Continental and First Hospitality will put up $20 million, and a $9.3 million clean energy loan is being sought from the Toledo-Lucas County Port Authority, though that has not yet been approved.

The county will purchase the Park Inn for $7.9 million at the end of October. In the meantime, the demolition of Hotel Seagate is expected to begin this fall with a cost yet to be determined.

Under the plan, the county is set to recoup its purchase costs, plus the $1.38 million it spent in 2014 to buy the Hotel Seagate. Continental is expected to bear the demolition costs.

“We’re announcing the partnership, we’re announcing that it will be a remodeled 309-room hotel, it will be a Hilton dual brand, and it will be a partnership where the expenses and the rest are spread but also the reward is spread over three parties,” Commissioner Pete Gerken said.

“The county will get a guaranteed debt service payment from the parties of the bonds we take out, which we thought was essential to protect the taxpayers. Plus there will be what we call a ‘2 percent premium return’ on our investment to help us, then we’ll have splits of the operating revenues,” Mr. Gerken said.

“This is a public-private partnership and because both Frank and Steve see the value of the Toledo market, as well as the board of commissioners, too, they’re willing to put private money into this deal,” Mr. Gerken said. “Any other investment, when you think about it, from Fifth Third Field to the Huntington Center, has been shouldered entirely by the county,” he added.

Lucas County saved the 48-year-old Hotel Seagate from the wrecking ball in 2014 and had formed a partnership in 2018 with First Hospitality to renovate it into a pair of mid-priced hotels with 220 rooms at a cost of nearly $60 million to be borne by the county.

But after signing a deal with the Lathrop Co. to rehabilitate the hotel, engineers from Lathrop took an intense look at the hotel and found significant flaws that would have increased the rehab.

About that time, Mr. Kass, who already had been looking at the Park Inn at the request of ProMedica, got together with county officials to discuss the Park Inn. ProMedica earlier had acquired an option to buy the Park Inn.

“It was a perfect alignment of three things. Lathrop did a very intense look at the Hotel Seagate and found that structurally it would have taken a lot more work. And at the same time, when we went with the Hotel Seagate the Park Inn wasn’t available,” Mr. Gerken said.

“So when we started that, there was no opportunity to partner for the Park Inn. I think it’s a credit to the board and our staff and these two gentlemen partners, that we’re flexible,” he added.

Mr. Kass said he had been working since May, 2019, on a deal to acquire and rehab the Park Inn, which is still owned by Simon Guo of PLT Holdings LLC.

The commissioners said they are seeking a $10 million grant under the federal CARES Act to help with renovating the convention center.

Much of the work of tearing down the Hotel Seagate and clearing land to build the pocket park is expected to take place during the current Summit Street construction project. The pocket park is expected to be a key contributor to landing future convention bookings.

County Commissioners President Tina Skeldon Wozniak said when the entire Park Inn/Convention Centre project is completed it should bring in another 200,000 visitors to the county and give a significant boost to the $1.3 billion tourism industry in Toledo.

Mr. Kass said when the project is done no mid-sized city in the Midwest will have better facilities than Toledo — other than Grand Rapids, Mich.

Commissioner Gary Byers said the one disappointment is not being ready for the Solheim Cup, which pits the best women golfers in the U.S. against those from Europe. But it is uncertain whether that will even happen in 2021.

As of now, it is happening, but that could change he said, adding he hopes a delay “is on the table” for Solheim officials. The cup is usually held in off-years with the Ryder Cup for men, and as of now the Ryder Cup will be played in 2021 due to a one-year delay.

“We’re hopeful they’ll consider moving [the Solheim Cup]. At this point, we’re just going to do the best we can do,” he said.

Mr. Schwartz said his company already is talking with architects for the Park Inn project, and said the Hilton properties likely will be in the same price range as rooms at the Renaissance, though they may vary depending on whether a convention is being held or not.

The Hotel Seagate’s location abutting the downtown convention center made it an attractive option for rehab and use as a lure to bring in larger conventions to the city.

Originally scheduled to be torn down in 2016, the process of deconstruction had already begun when the hotel was saved from the wrecking ball that year by the county after Mr. Schwartz told the commissioners the building still had potential. The county bought it for $1.38 million in 2014 with the intention of demolishing it.

In 2018 plans were announced for a redevelopment under Key Hotel Management, but they were replaced later that year by First Hospitality, and in February of 2019 a detailed project was unveiled to redevelop the hotel into a combination of 220 rooms and suites to provide lodging for convention-goers.

The Hotel Seagate redevelopment project was supposed to be the catalyst for satisfying lodging requirements demanded by the Solheim Cup. But when construction advanced last year, Lathrop found the flaws in the structure that economically meant opening mid-priced hotels would result in a difficult, if not impossible, task of paying off the $60 million cost of redevelopment.

By December the county commissioners had quietly begun looking to Mr. Kass’ project for the 15-story Park Inn. It took until this month to work out the particulars of the partnership, all the parties said.

When the Park Inn opens as Hilton properties, they will add 250 permanent jobs to the downtown, the commissioners said. The project also will create 100 temporary construction jobs.


Posted By: Toledo Blade on July 13, 2020.  For more information, please click here to read the source article.

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