Charlotte city government hopes to stem CIAA incidents

City leaders on Thursday continued grappling with isolated but highly publicized shootings during the Central Intercollegiate Athletic Association tournament week — and again endorsed the idea of new ordinances and permitting rules to better ascertain potential trouble areas.

In each of the past four years, shootings and fights during the annual CIAA tournament week have sparked questions about whether the city should keep hosting the event. The CIAA is made up of 12 historically black colleges and universities, including Johnson C. Smith University in Charlotte.

The tournament runs Feb. 27 through March 3 next year. Spectrum Center, Bojangles’ Coliseum and the convention center, all city-owned buildings, host the tournament games and fan festival. Charlotte has been home to the conference basketball tournament since 2006. The CIAA stands as the city’s most lucrative annual tourism event and is under contract to be played here through 2020.

In February, 100 shots were fired uptown near the Spectrum Center just before the CIAA championship game started. No one was injured. Police arrested three men for shooting at a hotel uptown in the early-morning hours following the end of the tournament in 2016. No one was hurt during that incident, either.

Injuries from shootings and stabbings at CIAA-themed events and parties in earlier years also raised questions about tournament safety.

During a City Council committee meeting on Thursday, city staff outlined possible solutions to stem the isolated violence, including a requirement for property owners to be held liable for unsanctioned pop-up parties and concerts around large events, including the CIAA tournament. The current policy is that promoters must secure permits and, since many promoters are based elsewhere, it’s hard to gain much cooperation if something goes wrong, city staffers said.

Shifting responsibility to property owners for so-called pop-up events through permitting requirements and other rules would likely help reduce crime risks.

Danny Pleasant, an assistant city manager, told the committee, “The more we know in advance, the more prepared we can be.”

Council members, tourism executives and the CIAA have said the violence has created a misperception about the tournament. All of the shootings and altercations occurred at parties, concerts and locations beyond the conference’s control. Julie Eiselt, a Democrat who also leads the community safety committee, said, “Unfortunately, scary things have happened at the time of the CIAA. The CIAA (tournament) is separate from that.”

There is no defined timetable for crafting an ordinance or other rules, but the city hopes to have something in place before the 2018 CIAA Tournament. The full council would have to approve any new ordinances.

Designated event zones that could be controlled by the CIAA and other organizers of large-scale tournaments, parades and festivals in Charlotte might also be part of the solution, Pleasant said Thursday.

City attorney Bob Hagemann and Pleasant heard committee members’ questions and concerns — several called for any new rules to avoid infringing on football tailgate parties, for example — and said they are continuing to research language and guidelines.

Carlenia Ivory, a Democrat, and Ed Driggs, a Republican, said the new policies under discussion are appropriate and could help, but also fall short of a larger problem of violence plaguing the city.

There have been 72 homicides to date in 2017, compared with 68 last year and 60 in 2015.

“I have a problem with us paying all this money to investigate four shootings versus what’s happening with the other 70,” Ivory said.

Driggs urged his colleagues “not to avoid some of the really thorny questions that do tie to race relations” and said “the real challenge ... is to not let it get politicized.” 

Driggs told me in a later interview that part of his concern is that when violence occurs around the tournament, the perception of public safety risk can infringe on the larger policy discussion of how to address economic inequality, affordable housing and social justice.

CIAA fans spent $27 million this year on hotel rooms, meals and other expenses during the tournament in Charlotte, according to research figures provided by the conference. That represented a decline of 14% from 2016.

Hagemann told the committee Thursday that violent incidents occurring at carnivals in the Charlotte area led council to pass an ordinance in 2004 mandating promoters hire CMPD or private security to improve safety. Soon after, carnival promoters stopped coming to Charlotte, Hagemann said.

Erik Spanberg
Charlotte Business Journal

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Charlotte establishment among world's top historic hotels

This uptown Charlotte hotel nabbed top honors at the Historic Hotels of America Awards of Excellence.

The 60-room Dunhill Hotel was named as the Best Historic Small Inn or Hotel.

A pool of 200 historic properties was whittled down, with 19 hotels from across the globe honored. The Dunhill was one of six properties vying for that best small inn honors.

The annual awards recognize innovative leadership and stewardship as well as preserve and celebrate the history of these properties.

The Dunhill Hotel is Charlotte’s only historic hotel. John Beatty is its general manager.

That property at 237 N. Tryon St. opened in 1929 as Mayfair Manor. It weathered the Depression by renting residential space.

The Dunhill is home to 2,500 square feet of meeting and function space, available for weddings and business as well as The Asbury restaurant.

The Dunhill is operated by Summit Hospitality Group in Raleigh.

Jennifer Thomas
Staff Writer, Charlotte Business Journal

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Charlotte tourism exec touts "new demand" of convention hotel

Tom Murray wants more rooms and more inns. Or at least one more inn with 800 to 1,000 rooms.

As reported by CBJ last week, Murray, CEO of the Charlotte Regional Visitors Authority, has begun making the case for a second convention hotel here. Recent presentations to trade groups and other discussions are aimed at building consensus on what could be a controversial pitch for using taxpayer money to help pay for a new hotel.

It’s a model used often in other cities across the country. And there is precedent in Charlotte, where the 700-room Westin opened in 2003. Murray said it will probably take at least four years to secure a project, win approval and complete construction.

The Westin Charlotte remains the city’s largest hotel and a convention hub given its proximity to the Charlotte Convention Center. Renovations of the convention center scheduled to be finished in 2021 include a pedestrian bridge connecting it with the Westin and the adjacent Novel Stonewall Station project. The $110 million makeover will be paid for with existing tourism tax money.

Tourism and political leaders supporting the convention hotel say Charlotte has begun to miss out on events because planners don’t want to have to negotiate with multiple hotels when they can go to similarly sized cities and secure blocks of rooms with one or two large hotels. And, the argument from Murray and other goes, adding a major convention hotel will lift demand for all hotels.

Similar cities including Austin, Baltimore, Indianapolis and Nashville have all added major convention hotels in recent years. Others with new convention hotels already open or in the works include Cleveland, Houston, Kansas City and Portland.

Industry analysts estimate the likely taxpayer investment in a convention hotel would be 30% or more of the construction price, the equivalent of $100 million or more based on a 1,000-room property with a price tag in the range of $350 million.

There are 26,000 hotel rooms in Mecklenburg County and 5,000 in uptown.

The visitors authority has 220 employees and an annual budget of $60 million. It recruits meetings, conventions, conferences and sporting events and also promotes the area for leisure travel. In addition, the authority runs the regional film commission and operates city-owned properties including the NASCAR Hall of Fame, Charlotte Convention Center, Bojangles’ Coliseum and Ovens Auditorium as well as engineering, maintenance and cleaning at the NBA arena.

Murray, who was chief operating officer at InterContinental Hotels Group (NYSE:IHG) and CEO of a New York-based cruise business before coming to the visitors authority in 2011, spoke with me as part of a recent interview about adding a convention hotel. Following are excerpts from our conversation.

On the early discussion of a new large-scale hotel: Years before I got here, people were talking about the need for a convention center hotel. These hotels attached to convention centers are a way to reduce your risk on building full-service hotels. So hotel developers are more interested in them.

And there’s been folks coming to this market to talk to us about our interest in that as well. We’re not anywhere far with anybody, we’ve just had some conversations, but it is a topic of conversation.

What they said in the Atlanta Business (Chronicle) article was that a lot of these end up having some element of public-private partnership associated with it. And so that is always a challenge when you start to talk about the use of our tax funds and the public-private partnership, and so we’re starting to prepare people for an argument about why you need a convention center hotel.

On why a new convention hotel is needed: The real base of this argument is, does it take business away from existing hotels? Or does it add to the pie, does it grow the pie bigger?

Hotel operators were concerned when I said we were going to build big competition for them. And so we’re just trying to make the case, as we’ve done with the Westin, when the Westin came into the market, nobody’s occupancy went down (based on statistics from independent industry analyst STR). Everybody went up and prices went up. (STR statistics show gains in the Charlotte market after the Westin opened until the recession hit in 2007; hotels began rebounding in 2009 and have shown consistent gains since until a slight dip in recent months.)

On where the money could come from if city council approved funding for a convention hotel: The uses of hotel taxes are up to the council. We’ll present to the council in conjunction with the city staff (possible) options, like we have with MLS soccer or with the amateur sports facility or any of those kinds of things.

It’s no secret that, in the long-range planning for (existing tourism) tax funds that we presented prior to the MLS project we presented to the city council, one of the projects we’re holding potential funds for is a convention center hotel. Knowing that the marketplace is rife with folks and cities that are going out and doing this same thing.

That’s our competition. One of the reasons we’re doing the convention center expansion is that we need to make sure we’re staying competitive against these other cities. Also, in this study (by consultant Jones Lang LaSalle on Charlotte convention business), they talked the city’s need for a large hotel in the uptown market because of the challenges that having to negotiate with multiple hotels make. (In Charlotte you may have to work with) two times as many hotels for the same block (of rooms) for a particular hotel planner.

On challenges: What is true is we’ve been keenly focused on staying up with the competition and we see they’re winning this race a little bit. We’re still a city with high demand and we’re one of those cities that other cities look to, but there are some leading cities out there like Indy and Austin that are getting the large hotel development before we are. And part of that is because of that rate gap (when some of those cities generate higher room rates on a consistent basis).

On initial response from hotels in Charlotte: The hotel community understands the unique nature of large hotel growth. Hotel growth is going to happen in this marketplace, but hotel growth that generates additional demand is the more attractive growth. The organic growth of smaller hotels is happening, but there is no evidence that that brings new demand. It eats existing demand. What we’re trying to do is bring hotel growth that makes the pie bigger. That’s why 1,000-room hotels are not 150-room hotels.

Erik Spanberg
Charlotte Business Journal

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Will millions of taxpayer dollars bring amateur sports bonanza to Charlotte?

A plan to build an indoor amateur sports complex near Bojangles’ Coliseum fizzled in 2014, but Charlotte tourism officials are trying again, hoping the promise of millions of dollars of public money will entice a developer.

The plan calls for a “destination-defining” indoor facility, with room for 10 high school regulation basketball courts and the ability to convert the space for 20 volleyball courts. There would be seating, restrooms, and food and beverages for sale.

The new plan would allow the sports complex to be built anywhere in the city – not just in economically struggling east Charlotte.

But it’s unclear whether the amateur sports complex would be the best use of the money, which would come from hotel/motel taxes that are restricted for tourism.

Would the new complex create new business – or just take away existing tournaments and events from the publicly owned Charlotte Convention Center?

There is also intense competition for basketball and volleyball tournaments, as Rock Hill is starting construction on a facility that’s almost identical to what Charlotte is considering.

“What kind of return is the city going to get?” asked Ron Esser, co-owner of Carolina Courts, a private indoor basketball and volleyball center with locations in Indian Trail and Concord that would be a competitor to the Charlotte venue. “It’s going to be tough to keep 10 courts completely full. There will be down times.”

He said each of his locations has four basketball courts each.

“We are carrying debt on eight courts of $5 million or $6 million, and we are barely making it,” he said. “If we had to carry $12 million in debt, we would be bankrupt in a year.”

Filling buildings

Charlotte’s first attempt at an indoor amateur sports complex was focused on the parking lot behind Bojangles’ Coliseum and Ovens Auditorium. The city wanted to build a hotel and gymnasium on the site, but it received interest from only one private developer, Florida-based GoodSports. But GoodSports never secured the financing for the project.

The city was prepared to spend up to $25 million on the project, but the deal fell apart.

The Bojangles’ site is now off limits because the Charlotte Area Transit System wants to build a light-rail line and station through the parking lot.

The Charlotte Regional Visitors Authority gave City Council’s economic development committee an update on the new plan last week. The city and the CRVA hope to enter into an agreement with a developer by the end of the year, if council members approve the plan.

The CRVA’s presentation did not give an estimated cost of the complex, though Rock Hill is spending more than $20 million. The CRVA said the private developer would have to pay at least half of the construction cost.

The CRVA already hosts large basketball, volleyball and cheerleading tournaments at the Charlotte Convention Center uptown. The center’s cavernous exhibit halls are converted to temporary courts, and the building can host numerous games at once.

The convention center’s bathrooms don’t have locker rooms with showers, but there is a food court already in place.

The CRVA said basketball, volleyball and cheerleading events generated 15,000 hotel room nights last year. That’s about 10 percent of the convention center’s total business for the year, which was 142,000 hotel room nights.

Building a new amateur sports facility could shift those events to a private developer and away from the taxpayer-owned Convention Center, which has seen its attendance and events drop since 2011. The CRVA is planning a $100 million renovation of the center to attract more business.

“We are about bringing business into the community, whether it’s in our building or other buildings,” said Tom Murray, chief executive of the CRVA. “We want to bring business that will fill multiple buildings. We think we’re desirable enough to continue to attract events (at the Convention Center).”

The new building would also face competition from Rock Hill’s new indoor sports complex, scheduled to open at the end of 2018. The Rock Hill complex will have 17 volleyball courts, 10 basketball courts and a championship arena with seating for 2,500 people.

“Ours is supposed to be the biggest in three states,” said John Gettys, chair of the Rock Hill Sports Commission.

In an interview, Gettys joked that Charlotte shouldn’t build its own indoor sports facility – “You don’t want to do that,” he said, suggesting that a new Charlotte facility would compete with Rock Hill’s clients.

But Gettys said he thought the two facilities could complement each other, even if Charlotte built its complex in south Charlotte, within 10 or 15 miles of Rock Hill.

“If you have them in some proximity, you can bring in even better tournaments,” he said.

Murray agreed.

“The truth is there is a lot of competition in the amateur sports business,” he said. “We hope to build a venue that’s highly competitive, and additional facilities (such as Rock Hill’s) might supplement what we do. These tournaments are so big that they need multiple locations.”

The CRVA said amateur sports overall – including sports such as softball and soccer – generated 215,000 hotel room nights last year.

Steve Harrison
Charlotte Observer

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Kimpton Tryon Park GM on what to expect when uptown hotel opens in October

Robert Hannigan has worked with San Francisco-based Kimpton Hotels & Restaurants for a decade, leading operations for hotels in Washington, D.C.; San Diego; Los Angeles; and Portland, Ore.

He's now come to the Queen City as the general manager for Kimpton Tryon Park Hotel, the 217-room hotel at Third and Church streets that's on track for a late-October opening. Among other duties, Hannigan is tasked with filling about 200 hotel and food and beverage positions, ranging from managerial roles, sous chefs, bartenders, room attendants and banquet chefs.

Hannigan is hoping Kimpton's accolades-earning employee culture and benefits will help draw in the best talent for those positions, though he acknowledges that the competition for labor is fierce, especially with the significant supply of hotel rooms coming online in the next several quarters.

"There’s always a concern about finding not only the right number of people, but the right people themselves," he said. "But we're going to keep looking."

Finishing work is underway at Kimpton Tryon Park, with furniture being loaded in and rooms on floors four to 10 at a significant completion point. Construction remains underway for the hotel's ground-floor Italian restaurant, Angeline's, and a rooftop bar called Merchant & Trade.

Hannigan recently spoke to the Charlotte Business Journal about the upcoming hotel, what the Kimpton brand is about and his take on the local hotel market. Excerpts have been edited for brevity and clarity.

What would you say are some of the key characteristics of a Kimpton hotel?

It’s very entrepreneurial. In a lot of other working environments in the hospitality industry, I was handed a set of rules — "Do this, say that" — and that's good. It taught me consistency and a good foundation for the operational environment. With Kimpton, we have the same benchmarks we have to hit: we have to have happy employees; we have to have a profitable business; we have to have a highly regarded hotel within our community; obviously, we have to have happy guests. But how someone gets there is left up to the individual property within that market.

We say, "OK, how do we make this brand and this hotel successful in Charlotte?" I think the amount of leeway I get to getting us there is very refreshing. That philosophy will trickle down to the employee level. We are not rigid in terms of operating structure. There’s going to be a lot of consistency in important areas — food service, check-in processes, handling guests’ information. There’s going to be a lot of standardization there to make sure that we’re operating in a responsible manner but how we take to the field for service recovery ... we want them to approach it with a lot of heart and a lot of compassion, as opposed to overstructuring the environment.

So what's specific to the Charlotte market in the upcoming Kimpton Tryon Park Hotel?

We have a social hour that’s daily from 5 to 6 p.m. We typically offer poured wines by the glass, we’ll have craft beers, we might have a fun cocktail. We will not say, "You must pour this Californian wine or this beer because it’s the least expensive." We’ll say, "OK, let’s invite Sugar Creek Brewing or Olde Mecklenburg in to collaborate with us with tastings and flights," or "Let’s find a great regional wine partner" — or, in the absence of that, let’s find a business that is female-owned, minority-owned or someone with a really compelling story.

Rather than, "Let’s do a steakhouse because it has X% of profitability," what does Charlotte want? We have found that there is opportunity for a great Italian-inspired restaurant, Angeline's, and Merchant & Trade is going to have a great, fun food menu and cocktails. We’ll look at the market and go, "What do we suspect Charlotte needs? Let’s do some research, let’s get out and talk to the community, let’s go see what’s missing."

In uptown Charlotte, there is a significant number of hotels in different stages of development. What does Kimpton have to offer that is either not here or perhaps is perceived to be lacking?

I think a top-flight culinary and cocktail program is something that the community is very excited about, and a very individualized spirit of service, where our staff is approaching you, wanting to help you on a personal level, as opposed to "This is my role; I’m going to take it so far and hand it off to the next person."

What are your key thoughts or takeaways looking at the hotel market here?

I am very excited about it. I know there are other hotels coming online. I think having a good, broad-based portfolio is important. You can’t have a "one and done" environment. Two or three large hotels is not going to drive additional jobs or help us with city-wide conventions. We actually need a good, healthy inventory of hotels here in the city.

Do you see any potential concerns in the market?

No, not yet. What’s coming online now are smaller key counts. What I’m seeing is 150-key hotels, 250-key hotels ... I believe there is the bandwidth for a convention hotel, something north of 1,000 rooms, but what’s coming to the market now, I think the city is going to be able to absorb without too much trouble.

Would you say we’re behind in supply right now?

It seems to be. That’s the feedback I’ve gotten — whether that was the Great Recession or deals penciling out in due course. These hotels coming online right now seem to be pretty highly anticipated. I think the community is very excited about it — I know we are. It’s going to be great to be part of a new crop of hospitality in the community.

Ashley Fahey
Charlotte Business Journal

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Campaign begins for convention hotel in Charlotte

A new convention center hotel with 800 to 1,000 roomsand paid for at least in part with taxpayer money looks more and more like an inevitability in uptown Charlotte.

Informal discussions among political, tourism and business executives have taken on greater urgency of late. Next week, City Council is expected to approve funding for final design and preparations that would set the table for a $110 million makeover of the Charlotte Convention Center— a project due to be finished in 2021 and one expected to increase the need for a second major hotel uptown.

Charlotte’s largest hotel is the 700-room Westin. It opened in 2003 near the convention center, built for $143 million, including $16 million in local government funding. Industry executives told CBJ that public money typically accounts for 30% or more of construction costs for convention hotels.

Assuming a price in the range of $350 million for a 1,000-room property — in line with current industry trends — taxpayers would be faced with a likely investment of $100 million or more.

The argument for subsidies goes like this: Hotels with anywhere from 600 to 1,000 rooms sacrifice some profitability as convention hubs because those properties guarantee blocks of rooms, often at lower rates, to help lure conferences, meetings and trade shows. Meeting planners want the convenience of being able to put attendees in one or two hotels, reducing possible logistical snags. And tourism executives in Charlotte and other cities crave the certainty of knowing they have enough rooms to pursue large-scale meetings and events without having to scramble to find hotel rooms.

Tom Murray, CEO at the Charlotte Regional Visitors Authority, told me Wednesday during an interview in his convention center office that a large-scale hotel like the one being discussed is unlikely to open for four or five years. But, he said, now is the time to start analyzing how a public-private partnership might be configured. Hotels and developers have expressed curiosity and interest in building a large-scale property here, but no one has made serious overtures to date, Murray told me.

Ambitious expansion and upgrades in peer cities, including Austin, Texas; Louisville, Ky.; and Indianapolis, have gotten the attention of Charlotte’s tourism sector.

“We see they’re winning this race a little bit,” Murray said.

Adding smaller hotels gives business and leisure travelers more options, but tends to shift bookings from one place to another around town rather than create additional demand, Murray and others in the industry told me. In that sense, the 500 rooms added uptown this year among the Embassy Suites, SpringHill Suites and other new properties, will not make much difference when it comes to conventions and conferences.

And, according to STR statistics, the number of sellout nights is rising across uptown hotels. That, in turn, industry executives said, limits the sales potential for the city. In 2014, there were 34 nights when uptown occupancy reached 95% or above. After dipping to 15 nights the following year, it reached 54 nights at 95% occupancy or greater in 2016. Through July of this year, there were 37 nights when 95% or more of the uptown hotel rooms were filled.

There are 5,000 hotel rooms in uptown, including the 500 opened so far this year. By early 2018, another 500 will be added, including the 216-room boutique Kimpton in Third Ward.

Though occupancy rates have dipped slightly with the additional hotels opened in recent months, tourism executives said the market remains healthy. And they pointed to consistent growth in the number of uptown residents and office buildings and tenants as factors that will sustain those increases. About 70% of hotel rooms citywide are filled, on average, a pace that remains well above occupancy that hovered in the low- to mid-60s for much of the 2000s.

Last month, at a trade group meeting, Murray looked on as Heath Dillard, the visitor authority’s director of business insights, made a presentation to local hotel executives outlining why a convention hotel is needed. The underlying message: Even if industry tax money paid by those same hotels winds up being used to help pay for a competitor to add as many as 1,000 rooms in uptown, it would be worthy because of the new events and business that would come with a new convention hotel.

Dillard’s presentation, using industry data from STR, pointed to market-wide gains in Austin, Nashville, Tenn., and Baltimore as examples. In those cases, to varying degrees, long-term trends showed gains for hotels across the board in room occupancy and an industry measure calculating revenue from each available room.

A portion of existing tourism tax money, special tax districts and other funding options are likely to be considered.

James Mitchell, a Democrat who leads the council’s economic development committee, told me Wednesday he is optimistic the city will find a way to attract and fund a new convention hotel.

“I look forward to that discussion,” he said. “We have to look at how Charlotte can remain competitive.”

Jeff Appelbaum, a Cleveland lawyer, has worked with local governments across the country on convention hotels, including a 600-room, $275 million Hilton in downtown Cleveland paid for and owned by county taxpayers. Appelbaum told me there are a number of ways to finance mega-hotels, but noted that attracting one without some form of public subsidy is exceedingly difficult.

Both of Charlotte’s mayoral candidates — Republican Kenny Smith and Democrat Vi Lyles — told CBJ on Wednesday that the upcoming investment in renovations at the convention center will create additional need for another major hotel. They both offered support, with caveats due to the lack of detail about a prospective negotiation between the city, the visitors authority and private developers.

“The question is, how do we pay for it?” Smith said. “It is hard to speculate on a deal that I’m not looking at. And then, if we put public dollars into a new hotel, how do existing hoteliers feel about helping their competition? I don’t see that going over.”

Vince Chelena, executive director of the Charlotte Area Hotel Association, the group that heard the visitors authority’s pitch, couldn’t be reached for immediate comment Wednesday. Earlier this summer, he told CBJthat a large block of rooms like those guaranteed by a convention hotel would be a draw, helping increase the overall amount of hotel business.

Others in tourism and hospitality said the industry would support a convention hotel, but only if it does more than just add room inventory.

Mohammad Jenatian, who runs the Greater Charlotte Hospitality & Tourism Alliance, said a convention hotel paid for in part by using industry tax money works only if it is large-scale enough to add meeting and conference space, too.

Lyles said she generally favors investments in tourism projects. “Anything that brings more bread and butter to our convention center, we ought to participate,” she said. “That kind of an investment makes a real difference. And it’s something we can measure.”

Similar arguments have been made in a number of other cities, where subsidies have partially or entirely helped land convention hotels. Discussions and negotiations for similar projects are underway in Broward County, Fla., Des Moines and Kansas City, among others.

Austin opened a 1,000-room JW Marriott in 2015 and, later this year, another 1,000-room property, the 37-story, $370 million Fairmont Austin, will follow. The Fairmont illustrates what Jenatian, the Charlotte trade group leader, has in mind: it will include 112,000 square feet of meeting space.

A CBRE study of Charlotte’s response to the opening of the Westin found that, despite the hotel’s 700 rooms increasing uptown inventory by 21%, occupancy kept growing in center city hotels until the recession arrived in 2008.

Nashville, like Austin, poses bigger and constant threats to Charlotte in competition for conventions, trade shows and other major events. In 2013, a new $623 million convention center opened in Nashville. Known as the Music City Center, it covers 2.1 million square feet, nearly four times the size of the 550,000-square-foot Charlotte Convention Center. According to The Tennessean, the new convention center failed to reach initial projections, raising questions about the public investment.

For rival cities in the Southeast, including Charlotte, the rise of Nashville has made it harder to recruit events, a circumstance exacerbated by the opening of a $270 million, 800-room Omni convention hotel in October 2013. Close to half the cost, $128 million, will be borne by taxpayers.

Louisville, another comparable city to Charlotte, is also upping its convention game with a two-year, $200 million overhaul of the city-owned convention center.

Erik Spanberg
Charlotte Business Journal

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A look inside the dual-branded hotel now open in SouthPark


The dual-branded Hilton Garden Inn and Homewood Suites opened on Wednesday near SouthPark mall on Sharon Road.

Click through the accompanying photo gallery for a virtual tour of the property.

The project includes 270 rooms total, with 160 rooms in the Hilton Garden Inn and 110 rooms in the Homewood Suites.

A variety of communal areas throughout the dual-branded hotel provide space ideal for both business and leisure travelers. The hotels have two separate lobbies and dining areas, a 24-hour fitness center, an outdoor heated pool and 2,500 square feet of flexible meeting space.

The Homewood Suites has studio and one-bedroom accommodations complete with full-kitchen and living areas for extended stay travelers.

As of Monday morning, websites for the properties showed single-night room rentals priced in the neighborhood of $250 and up.

Melissa Kay
Charlotte Business Journal

View photos here

New hotel is open near a busy SouthPark intersection

There’s a new hotel open in SouthPark, on Sharon Road just south of Fairview Road: A dual-branded Hilton Garden Inn/Homewood Suites by Hilton.

Totaling 270 rooms split between the two brands, the new hotel expands the inventory of rooms in an area that’s growing rapidly denser. It also includes 2,500 square feet of flexible meeting space. The hotel is owned and managed by Chartwell Hospitality LLC.

“Whether visiting for business or leisure, our dual-brand property provides diverse accommodations for visitors with varying needs, and our convenient location and value-added amenities deliver 

savings and quality that today’s guests demand,” said John Bensing, general manager of the dual-branded property, in a statement.

Dual-branded hotels, with two separate hotels in one property, have become more popular in recent years. They allow hotel operators to appeal to more guests on the same site with different offerings, such as suites and smaller rooms, while sharing some amenities, overhead and behind-the-scenes facilities. For example, a combined AC Hotel and Residence Inn by Marriott are under construction in one tower atop the EpiCentre uptown.

In SouthPark, the hotels will have separate lobbies and dining areas, and a shared pool and 24-hour gym.

Ely Portillo
Charlotte Observer

Construction underway on first hotel at Stonewall Station

The first of two hotels planned for an uptown mixed-use development site began construction this week.

On Sept. 5, Whiting-Turner Contracting Co. broke ground on a Home2 Suites by Hilton at the corner of Stonewall and Caldwell streets within Crescent Communities' Stonewall Station project. The 181-room hotel is being developed by Doradus Partners — formerly Yedla Management Co. — out of Huntsville, Ala.

The 10-story hotel will include a meeting room on the top floor, a lobby on the second floor, fitness center, gathering space and an outdoor pool deck, according to Richard DeMarco, chief development officer at Doradus Partners. The flag — the first one of its kind in uptown — is an all-suite, extended-stay brand by Hilton.

In addition to the hotel, current plans call for about 13,500 square feet of ground-floor retail, DeMarco said. An agreement is in place to sell back the retail portion to an entity arranged by the master developer of the site "upon substantial completion of that portion of the building," DeMarco said. The Home2 Suites has an expected construction timeline of 18 months.

The second hotel site, which is immediately south of the Home2 Suites, was recently sold to an affiliate of Georgia-based Mayfair Street Partners. In a joint venture with Sefira Capital, MSP will develop a 181-room Even Hotel. That hotel, which is being built with modular construction, is expected to open in the first half of 2019.

A good chunk of development is nearing completion at Crescent Stonewall Station. Charlotte-based Crescent Communities is building 459 upscale apartments and 64,000 square feet of retail, the majority of which will be leased by Whole Foods Market.

Whiting-Turner is the general contractor on the Home2 Suites. The RBA Group is the project engineer and architect.

Kurt Schoenhoff at Selwyn Property Group represented Doradus Partners and Crescent Communities in the Home2 Suites transaction as well as MSP and Crescent in the second hotel deal that closed last week.

View the full article here


Another new uptown hotel is opening in February, featuring a rooftop bar and restaurant

The new, dual-branded hotel under construction atop the EpiCentre plans to open in Feb. 2018, the project’s developers said Wednesday.

The AC Hotel and Residence Inn, both in the 22-story tower, will total 300 rooms. The new hotel will also include a rooftop bar, retail space that’s available for lease, a “super suite” to rent and meeting space.

The hotel is the latest to plan an opening in Charlotte, adding to the city’s rapidly growing inventory of uptown hotel rooms. Next to Romare Bearden Park, the Kimpton is opening a 217-room hotel this fall. Already this year, an Embassy Suites, Springhill Suites and boutique hotel named Ivey’s have opened uptown, adding about 500 rooms to the market.

The rooftop bar will be independently run and open to the public. Hotel developer McKibbon Hospitality is partnering with Asheville chef Peter Pollay on the project. He owns the Posana restaurant, a farm-to-table eatery in downtown Asheville. At McKibbon’s AC Hotel in Asheville, Pollay is a consultant on a rooftop tapas bar called Capella on 9. He’ll be the consulting chef for the Charlotte rooftop restaurant, McKibbon said.

The company also named two hospitality veterans to be managers for the Charlotte hotels. Don Lockhart will serve as general manager for the AC Hotel Charlotte City Center and Maxine Elleby will be market director of sales for the AC Hotel and Residence Inn Charlotte City Center.

“Both Don and Maxine have experience working in the Charlotte hospitality market, and we are confident they will each play a key role in the overall success of the AC Hotel and Residence Inn Charlotte City Center,” said Karl Oates, vice president of lifestyle hotels for McKibbon.

The new hotel tower will be split, with the AC Hotel’s 184 rooms on floors five to 12 and the Residence Inn’s 116 extended-stay suites on floors 14 to 21. A 1,350 square-foot, two-bedroom “super suite” will be on floor 22, adjacent to the bar. Catering to high-rollers, the suite will be available to rent directly from McKibbon.

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CRVA: Tourism a big economic driver for Charlotte region in 2016

Tourism figures released this week by the state show the Charlotte region raked in record dollars last year from spending generated by visitors.

That economic impact is to the tune of $6.7 billion across the Charlotte region — of which the bulk, $5.16 billion — came from visitor spending in Mecklenburg County.

The Economic Development Partnership of North Carolina, a public-private partnership, released on Tuesday a county-by-county breakdown of the $22.9 billion spent by domestic travelers across the state in 2016. The report showed that visitor spending increased in 97 of North Carolina's 100 counties, led by Mecklenburg County. Wake County (Raleigh) generated about $2 billion, while Guilford (Greensboro/High Point) Dare (the Outer Banks) and Buncombe County (Asheville) counties brought in $1 billion each, according to the report, which is conducted annually by the U.S. Travel Association on behalf of Visit North Carolina — the state's tourism branch.

In 2015, North Carolina generated $21.9 billion in spending from domestic travelers, a record at the time.

But the tourism figure reported earlier this year for 2016 topped that amount despite the state's controversial House Bill 2, a piece of legislation controversial for provisions deemed discriminatory against members of the lesbian, gay, bisexual and transgender community. The law, which was replaced this spring, had passed through the N.C. General Assembly in March 2016 and caused myriad sporting events, concerts and other arts performances to pull out of Charlotte and the state.

"Charlotte's visitor economy has strengthened year after year,” Charlotte Regional Visitors Authority CEO Tom Murray said in a statement Wednesday. “2016 presented both challenges and opportunities for our city and state, and we have worked hard to recruit and host impactful events that continuously enhance our city’s quality of life. We wholeheartedly believe that visitor spending enriches our community for not only those who visit here but also for all who call this community home.”

The local tourism agency said visitor spending in the region increased 2.8% from 2015 to 2016. Employment in the sector rose 2.1% year-over-year to 64,490, as payroll increased 3.6% to nearly $2.1 billion.

The CRVA pulled research from the South Carolina Department of Parks, Recreation & Tourism for the Charlotte region's counties located in South Carolina.

While Mecklenburg County overwhelmingly captured the most local tourism dollars and had the most employees in the sector (50,770), Cabarrus County ranked second at $433 million and 4,500 tourism-sector employees. Gaston and Iredell counties came in next, with visitor spending of $251.7 million and $247.26 million, respectively. Tourism employment there was nearly matched ranging between 1,910 and 1,950 workers.

Citing data from research firm Longwoods International, the CRVA said that one million more visitors came to the Charlotte region in 2016 from the previous year, totaling 27.8 million. It also used data from travel research firm STR that showed a 3.3% increase in the number of hotel rooms sold in the Charlotte region from 2015 to 2106, totaling 9.6 million and generating $993 million in hotel room revenue.

To determine the impact of visitor spending in North Carolina, the U.S. Travel Association study accounts for sales and tax revenue data, employment figures as well as other industry and economic data.

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Big new hotels are popping up all over uptown. Are there too many?

Developers are rushing to open new hotels uptown and gearing up to start construction on more, betting that even as supply surges there’s enough demand from travelers to fill the hundreds of new rooms.

And long-simmering talk of a new, 1,000-room hotel – considered the gold standard for luring big conventions and mega-events – appears to be gaining momentum. Such a hotel, which could require a potentially controversial public subsidy, has long been a dream for Charlotte boosters.

Developer Johno Harris said this week that he thinks there’s enough room, and enough demand, for such a hotel at the huge new development Lincoln Harris is building on Stonewall Street.

“I think that Charlotte is at a stage in its career that the demand for a large convention hotel is there,” Harris told the Observer. “We’ve got the land. I think there’s a lot of opportunity to do that.”

Michael Smith, CEO of Charlotte Center City Partners, declined to comment specifically on what he’s hearing about a new convention hotel. But he agreed with Harris’ general premise.

“There has been interest expressed from the market to look at our center city,” said Smith.

Even without a single new mega-hotel, the growth of uptown’s hotel market has been dramatic, with about 1,000 new rooms set to open in a one-year span. That’s more than a 20 percent increase.

Almost 500 new rooms have been added uptown already this year, with the Embassy Suites, Springhill Suites and Ivey’s opening their doors. Another 217 rooms are coming this fall, when the new Kimpton opens next to Romare Bearden Park, and 300 more rooms will follow in early 2018 when the dual branded AC Hotel/Residence Inn by Marriott opens atop the EpiCentre.

After that, developers plan to start construction on another round of new hotels.

The Grand Bohemian, a 254-room luxury hotel on West Trade Street next to the Carillon building, is planning to break ground by the end of the year. A 270-room Intercontinental hotel is part of the Carolina Theatre renovation underway on North Tryon Street, expected to open in 2019. On Stonewall Station, a new Home2 Suites by Hilton that will add about 150 rooms could also start construction later this year.

“These construction booms on the hotel side come in waves,” said Vince Chelena, executive director of the Charlotte Area Hotel Association. “I think developers see they can make some money.”

“We’ve absorbed it pretty well, so far,” he said.

And it’s not just uptown that’s seeing more hotels. A 219-room Tru by Hilton/Hampton Inn & Suites broke ground last week near the airport. A 188-room Marriott hotel is opening next spring near Northlake Mall, and a 270-room Homewood Suites/Hilton Garden Inn is opening next month in SouthPark.

Figures from the Charlotte Regional Visitors Association show the new supply is starting to have an effect on occupancy. As of April, hotels in Mecklenburg County were averaging 70.2 percent occupied, down from 72.6 percent as of the same month last year.

But despite that, the average daily rate travelers paid was actually up slightly from 2016, reaching just over $113 a night. And revenue per available room, a key metric of health in the hotel market, was flat at just below $80 a night. That means that even though the number of rooms is going up, hotels aren’t lowering rates yet, because demand is still strong enough to make up for it.

Vinay Patel, president of SREE Hotels, opened a new Springhill Suites across from the Spectrum Center in April. He said that so far, the hotel is doing better than his company’s projections. And though Patel is keeping a wary eye on the number of new hotels hitting the market, he said business demand remains strong.

“Supply is definitely an issue, a concern, but the corporate transient market is sill pretty robust,” said Patel. “The fundamentals are still OK. Unless something really crazy happens and the fundamentals drop off, we’ll be OK.”

Tom Murray, head of the CRVA, agreed.

“A temporary flattening of occupancy doesn’t seem to be a main concern,” he said. “What we’re also seeing is still strong revenue growth. All in all, I’m comfortable with the market trends.”

A 1,000-room hotel?

Uptown’s hotel market has grown up with the city. From 1,676 rooms in 1985, the number of rooms had nearly tripled to 4,568 by 2015, according to Charlotte Center City Partners. There are now just over 5,000 hotel rooms uptown.

Right now the closest Charlotte has to a 1,000-room hotel is the Westin, with 700 rooms, which opened in 2003. The city invested about $16 million in the project.

Tom Murray, head of the CRVA, said the 150- to 300-room hotels that have made up most of the new supply in Charlotte so far don’t generate new demand, because they don’t have the meeting space and mega-blocks of rooms that help lure large conventions.

“They tend to use the existing demand,” said Murray. “They don’t bring demand generators like large meeting space.”

In recent years, Austin opened a 1,066-room Fairmont hotel, Houston added a 1,000-room Marriott Marquis and Boston announced a 1,000-room Omni Hotel.

“We’re falling behind them in large hotel development. We need another large, convention center hotel in our community,” said Murray.

Depending on the amount of public money involved, such a proposal could be controversial – just look at the dispute over public funding for a Major League Soccer stadium in Charlotte. The CRVA is also seeking about $100 million to renovate and upgrade the Charlotte Convention Center, adding more meeting spaces in addition the large exhibit halls.

Ely Portillo
Charlotte Observer

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Uptown's newest luxury hotel has an opening date this fall

The Kimpton hotel under construction next to Romare Bearden Park is planning to open Nov. 17 to guests, the company said Wednesday.

The 18-story, 217-room hotel is officially called the Kimpton Tryon Park. The hotel is offering specials of up to 20 percent off for some stays through April 30, and has launched its website,

It’s adjacent and connected to the 300 South Tryon office tower being developed next door, where tenants are expected to start moving in this month. The 25-story tower is nearing completion.

The Kimpton Tryon Park will include a ground-floor restaurant, a 1,400 square-foot rooftop bar and event space, and 9,000 square feet of meeting space. It will join a surge of new hotels opening this year uptown, including the Embassy Suites (250 rooms), Springhill Suites (195 rooms) and the boutique Ivey’s Hotel (42 rooms). A dual-branded Residence Inn/AC Hotel by Marriott (300 rooms) is under construction atop the EpiCentre and should open by early 2018.

Ely Portillo
Charlotte Observer 

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CAHA Hires Housekeeping Graduates

We would like to congratulate the new graduates of the CPCC housekeeping certificate program. A graduation ceremony took place today at the CPCC training center and each proud graduate received their certificate from Vince Chelena, CAHA executive director. Then CAHA member HR managers interviewed each graduate. It looks like all will be hired! Congratulations graduates and welcome to the hotel business!

Charlotte convention hotel likely to need hefty taxpayer subsidy

In the spring of 2013, just as a new convention center was about to open in Cleveland, local government and tourism boosters began rallying for a major hotel to boost the project. They had their eyes on recruiting more events, including what became a successful bid to host the Republican National Convention last summer.

By the time the RNC arrived last year, the political convention’s headquarters hotel just happened to be a newly opened 600-room, $275 million Hilton connected to the convention center. Cuyahoga County taxpayers are footing the entire construction bill — and counting on future conventions and other events to make the hotel a financial success.

As the Cleveland example shows, the convention business continues to be a high-stakes affair not just for cities, but often for taxpayers, too. Convention centers almost always require subsidies and are viewed as loss leaders for hotels, restaurants and other tourism industry businesses. Critics contend the investments too often fail to yield a return and, because of national arms races similar to sports stadiums and arenas, require additional taxpayer money to fund renovations and upgrades. And, in many cases, companion hotels.

Charlotte City Council this week heard the beginning of a similar debate likely to gain momentum in the months ahead. In August, council is expected to vote to spend $100 million, using a portion of existing tourism taxes, to pay for renovations and expansion at the 21-year-old convention center. The taxpayer-funded convention center cost $150 million to build.

The Charlotte Regional Visitors Authority listed a convention hotel among its funding priorities for the next six years during a presentation to council. Council member James Mitchell, a Democrat who leads the economic development committee, told CBJ a convention hotel is needed sooner rather than later to take advantage of the convention center upgrades as soon as possible.

Ron Kimble, who is advising the visitors authority as a special assistant to the city manager, listed a convention hotel as a potential target for existing tourism taxes along with more NFL stadium upgrades, an amateur sports complex and the convention center expansion.

So far, reaction has been muted. Mohammad Jenatian, head of the Greater Charlotte Hospitality & Tourism Alliance, a prominent industry trade and lobbying group, told me had heard little about the latest talks to build a convention hotel. Mostly, he said, the emphasis needs to be on any types of projects that can help bring in events and promote visitor spending, a middle-of-the-road statement from a group that usually is entrenched in such negotiations.

A high-profile Charlotte hotel executive who spoke on background said more detail is needed on how much public funding might be involved before determining whether such an investment makes sense. There are roughly 1,000 hotel rooms being added this year in the uptown area and another 2,000 under construction or in the planning stages.

In 2003, The Westin Charlotte opened next to the convention center. The 700-room hotel cost $143 million, including $16 million from the public sector. Tourism executives have said the city needs another major hotel, in the range of 800 rooms or more, so that large-scale conventions can concentrate attendees at one or two hotels rather than being forced to book rooms at smaller, scattered hotels.

“It is a draw if you have a large block of rooms,” Vince Chelena, Charlotte Area Hotel Association executive director, told me. “If meeting planners can utilize one or two hotels, it keeps everybody under a couple of roofs. ... We’ve got a lot of hotels coming online right now — we’re absorbing growth pretty well.”

Occupancy rates have ticked downward in recent months, but average room rates and revenue generated by each available room — two benchmark measures — have held steady.

One of the architects of the Cleveland convention hotel told me this week that it’s all but impossible to lure a convention hotel without providing some public investment.

In Cleveland’s case, the hotel is currently forecast to generate in the range of $43 million annually. Beyond operating expenses such as labor and equipment, and the cost of maintaining and repairing the hotel, $9 million per year will be dedicated to paying back the construction cost, said Jeff Appelbaum, a Cleveland lawyer, who has worked with a number of city and county governments to build sports venues, convention hotels and other projects.

Appelbaum told CBJ it’s possible the county could reap $1 million to $2 million in profit shares if the hotel stays on its present course. Cleveland enjoyed a strong tourism season as the convention hotel opened. In addition to the RNC, the NBA’s Cavaliers won the 2016 championship, an extended playoff run that brought media and other visitors, and baseball's Indians reached the seventh game of the World Series in the fall.

Industry consultant John Kelley cited visitor trends in several cities that have recently opened convention hotels as proof that such investments can generate a return for local tourism.

Appelbaum, the attorney, said one of the first things Charlotte tourism and government executives will need to do is determine what kind of deal they hope to negotiate. In some cases, including Cleveland, the city or county develops the hotel and then hires an operator. Appelbaum estimated Cuyahoga County saved $12 million by not using an outside developer. Other models include hiring a developer to build the hotel and then turning it back over to the public entity to hire an operator or having a developer who owns the hotel and hires an operator.

Subsidies on convention hotels usually add up to 30% of the cost or more, Appelbaum told me. Almost every convention center hotel is publicly owned or subsidized, he added.

Examples abound. In Kansas City, a $310 million, 800-room convention hotel scheduled to open by 2020 includes $35 million in public money as well as free land for the developer. Public money accounts for $74 million, or 31%, of the $240 million, 600-room convention hotel planned in Portland. Nashville taxpayers pumped $128 million into an 800-room Omni convention hotel completed in 2013. And so on.

Risks range from the competition among cities to land conventions and conferences to the volatility of the overall economy. And, of course, convention hotels always require extensive trade-offs, starting with a commitment to block off large chunks of rooms for conventions and meetings — and often at discounted rates.

Baltimore taxpayers paid the entire cost for a $300 million, 750-room Hilton convention hotel that opened in 2008. Since then, according to sister paper Baltimore Business Journal, the city-owned hotel has lost $80 million. The losses prompted the head of the Baltimore council to recommend selling the hotel two years ago, but, as of now, it is still owned by local government.


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