Transforming a building from one use to another, such as a hotel, presents numerous development challenges, but the results can make the process worthwhile.
GLOBAL REPORT—Adaptive reuse, the process of transforming one kind of building to another, such as a hotel, often presents financing, design and construction problems for developers. But the results can make it worthwhile, sources said.
Often, the decision to redevelop another building into a hotel is a matter of necessity.
“I was looking for another development opportunity and looked at a number of ground-up sites, but I just couldn’t locate that right opportunity,” said Jim Brady, developer of The Press Hotel, a 110-room independent property in Portland, Maine, which is being adapted from a former office building. “I found this building and looked at it as either a hotel or a residential project.”
Brady purchased the building and through due diligence determined the best use of the building was as a hotel. Construction on the project, which also includes a 100-seat restaurant, started in January with an early 2015 opening scheduled.
Brady said in many ways the building was perfect for conversion to a hotel.
“The building had housed the Portland Press Herald newspaper from 1923 to 2009, so it had a single user its entire life until now,” he said. “Another developer had purchased the building and planned to reposition it as an upscale office building. He spent over $1 million on a fairly extensive interior demolition, so when we acquired it the building had the entire mechanical, plumbing and electrical systems ripped out. There was very little hiding behind the walls.”
According to David Lloyd, principal with Archetype Architects and architect on the project, while the development process has gone smoothly so far, working in an already defined structure poses design challenges.
“When you first look at a building such as this the first consideration is its shape and size,” Lloyd said. “This one lent itself very well to a layout as a hotel because of its rectilinear shape. You don’t want a square-shaped building where there is a lot of unused space in the center.”
The challenge for Lloyd came in the fixed dimensions of the rooms.
“You’ve got to work with the dimensions you’re given, versus the ideal dimensions which are available on traditional new-construction projects,” he said. “In the guestrooms, you want to get the ideal amount of space so it’s a matter of going back and forth to optimize the best-possible unit sizes. You’re fighting for every inch of space in the room,” he added.
Lloyd said further complicating the project is its reliance on historic tax credits for part of the financing. He said the goal is to place the historic character of the hotel and its artifacts into proper context.
“It’s somewhat of a conflict because we’re trying to build a new hotel with a new image, which means you’ve got to balance between providing this piece of history back to the community while also delivering a 2014 hotel to the community,” Lloyd said. “It’s a constant balancing act between the historic fabric and the new design.”
Less of an issue is the hotel’s bid for Leadership in Energy and Environmental Design certification. Aside from the paperwork requirements, which Lloyd described as a hassle, the process has been routine.
“It’s quite straightforward,” he said. “You go through the checklist and make sure you’re conforming to LEED standards. In fact, we would have designed many of the energy efficiencies into the building, regardless of whether we were going for LEED (certification).”
The hotel’s status as an independent created financing challenges for developer Brady. He said financing would have been difficult to obtain if he hadn’t affiliated the property with Marriott International’s Autograph Collection.
“If we would have tried to get financing without the connection to Marriott, we would have been stopped dead in the water,” Brady said. “It was virtually impossible (to finance) as a pure independent.”
The Eden House Hotel, a 12-room property in Tel Aviv, Israel, was a private residence built in the 1920s before developers Mikhael Ustinov and Sergei Solovyov created the hotel, which opened in 2011.
“The idea was to create a boutique hotel that was unique and special in a neighborhood that didn’t have anything of this sort,” said Ari Ross, the hotel’s director of marketing. The property is in the city’s historic Yemenite Quarter near the Carmel Market and the Mediterranean Sea.
The challenge in creating the boutique, Ross said, was adapting to the neighborhood that until gentrification in recent years had been a quiet, family-oriented part of the city.
“The neighborhood hasn’t changed in 40 or 50 years, and only in the last few years has it seen new luxury condos, some new restaurants and now the Eden,” Ross said. “The challenge was to adapt to the neighborhood and not cause any aesthetical disruptions.”
Physically, the building was in disrepair and required extensive renovation to create the hotel. The process took the developers nearly two years to complete, Ross said.
“They had to gut the entire inside and repair everything from the staircases to the terraces to the common areas,” he said. “They had to redesign all the elements of the building, except for the building itself.”
The owners also had to remove a two-story-high tree planted in the middle of the building around a small café and restaurant that existed on the site.
Even though the hotel is small, unbranded and away from the business core of the city, Ross said it attracts a lot of business travelers, in addition to leisure guests.
“Tel Aviv is a very high-tech and attractive city for businesses and startups, and we’re finding a lot of business travelers who instead of staying at impersonal and sterile traditional hotels prefer our hotel because they can return after their day and not feel as though they are in a complete business zone,” Ross said. “For business travelers, as long as they have their amenities and connections, there is no reason for them to stay at a massive hotel that treats them like they’re just one among a million.”