Hotels Signal Growth in New Haven
(7/16/2009) By ERIC GERSHON The Hartford Courant
July 14, 2009
Hotel developers have delayed, scrapped and revised projects across America as the recession has scared off guests and financiers, but they're forging ahead in Connecticut's third biggest city.
Downtown New Haven hadn't seen a major new hotel in decades until last November, when The Study, a 124-room hotel, opened on Chapel Street, a few blocks from the city green. These days The Study appears to be on the leading edge of an Elm City hotel renaissance.
Later this summer the Courtyard New Haven expects to finish a 47-room addition and The New Haven Hotel will start top-to-bottom renovations of its 92 rooms. A hotel also figures in Northland Investment Corp.'s emerging plans for the New Haven Coliseum site.
Centerplan Development shelved plans for a "high-end" 250-room hotel last year, citing the economy, but still envisions a hotel on its College Street property, just south of the green.
Now, Hampshire Hotels & Resorts of New York is trying to line up an upscale hotel with 150 to 200 rooms for the 165,000-square foot building it owns at the northeastern corner of the green.
Hampshire has not yet submitted plans for the stately, 14-story red brick building, built in 1928 for The Union and New Haven Trust Co., now partly occupied by a Wachovia bank branch. But the firm has met with city officials to discuss the possibility of a "deluxe hotel brand" in the 205 Church St. property, once home to the venerable, now disbanded law firm Tyler, Cooper.
Developers and economic development officials attribute hoteliers' interest in New Haven to unmet demand for rooms downtown (there are about 800 now) and the potential for the city's thriving health care and education institutions to generate more.
Yale-New Haven Hospital's 156-room cancer center, scheduled to open this fall, is expected to draw patients and their families from around the world. Yale University's plans to grow undergraduate enrollment by 15 percent could increase visits by parents. And planned construction of private office and lab space for biotechnology companies could stimulate business activity generally, they say.
The boom contrasts with circumstances in Hartford, where the Goodwin Hotel, perhaps the Capital City's most distinguished hotel, closed last year.
Dwindling opportunities in bigger cities also may be forcing hotel developers to consider smaller markets, said Kelly Murphy, New Haven's economic director, noting that other types of commercial developers are making major investments in New Haven.
"Someone risking $180 million in downtown New Haven says something," she said, referring to a 500-unit apartment tower now rising at 360 State St.
Hotel occupancy in New Haven rose 2 percent in 2008, to 62.8 percent, even as local supply grew and occupancy nationwide fell more than 4 percent, to 60.4 percent, according to SmithTravelResearch. In Connecticut, occupancy fell nearly 5 percent last year.
Hampshire thinks there still is unmet demand for upscale lodgings and for meeting space, said Brendan McNamara, a company vice president, but is still researching how best to meet it.
Hampshire bought the building in 2006 for $11 million — $6 million less than the 1989 sale price. The company is busy rehabilitating the masonry exterior and replacing windows.
Michael Schaffer, a New Haven real estate developer whose company, C.A. White, owns two hotels outside the city, called an additional 150-200 hotel rooms downtown "a little bit of a reach." But he doesn't consider Hampshire's ambition "unreasonable or unrealistic."
"Clearly, over time, this market will sustain another hotel," he said. "It's not entirely a zero sum game…You're going to create additional room nights with an additional hotel."
Copyright © 2009, The Hartford Courant
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