$28M construction loan secured for uptown hotel


Construction financing has been secured for a new hotel in uptown Charlotte.

A $28 million construction loan has been arranged for a joint venture that's building a 176-room Even Hotel at the Stonewall Station mixed-use development. Georgia developer Mayfair Street Partners and Florida real estate private equity group Sefira Capital are developing the hotel, which is being built using modular construction.

Mark Ebersold at NorthMarq Capital arranged the construction loan on behalf of the borrower through a local bank lender and a New York-based mezzanine lender. NorthMarq is a commercial real estate financial intermediary based in Minneapolis.

The Even Hotel is one of two hotels to be built at Stonewall Station. It will be developed on a 0.4-acre site fronting Caldwell Street while another developer, Alabama-based Yedla Management Co., is spearheading a 180-room Home2 Suites by Hilton hotel next door at the hard corner of Stonewall and Caldwell streets. The hotels represent the last phase of the mixed-use Stonewall Station project, which also includes a 36,000-square-foot Whole Foods Market that opened last month, additional retail space to be leased, Crescent Communities' 458-unit apartment development and a 1,350-space parking deck. Charlotte-based Asana Partners recently acquired most of the retail at Stonewall Station, including Whole Foods, for nearly $34.1 million.

Mayfair acquired the hotel site last summer for $4.5 million. The Even Hotel, Charlotte's first, will include a fitness center, healthy food and beverage options and in-room fitness, true to the flag's wellness focus.

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Convention bid now in question?

While a Charlotte delegation is planning to make the trip to Austin, Texas, later this month where the Republican National Committee is expected to pick the host city for the 2020 Republican National Convention, it's now not clear Charlotte's bid will have the full support of city government.

According to several media reports, some Charlotte City Council members are unsure how they will vote when bid comes before an open council meeting. So far, all council discussions of the bid have been behind closed doors.

Lawana Mayfield is the only council member who has publicly expressed opposition to Charlotte's bid, WSOC-TV reports. The station says liberal activists plan to protest the convention bid at future council meetings.

The Charlotte Observer reports another council member, Justin Harlow, a Democrat representing northwest Charlotte, is concerned about protests. At-large council member Democrat Braxton Winston said in a Facebook video that the decision to host the convention should be about more than economic development.

The Charlotte City Council has a 9-2 Democratic majority. Mayor Vi Lyles announced her support the the RNC 2020 bid in February. “I think we’re going to have an opportunity to once again showcase our great city,” Lyles said at the time.

NCGOP Executive Director Dallas Woodhouse, who has worked with Charlotte on the bid, said in a statement: "We are proud of the strong partnership between NCGOP, city, county and tourism officials to bring N.C. and Charlotte the 2020 RNC Convention. N.C. should be proud so many can set politics to the side for economic development opportunities."

The GOP hosts its quarterly meetings in Texas starting July 18. 

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UNC Charlotte plans $84M hotel, conference center on campus

Ronald Reagan still lived in the White House when UNC Charlotte first added an on-campus hotel and conference center to its wish list. Now, the reality of such a project could be little more than two years away.

On Monday, UNCC chancellor Phil Dubois and representatives from the Charlotte Regional Visitors Authority made a joint pitch to City Council for the long-sought hotel and conference center. Under the terms negotiated by the school and the tourism agency, the hotel and conference center would cost $84 million to build and open in time for the 2020 school year. 

The 4.4-acre site targeted for the project is located at the J.W. Clay Boulevard-UNCC stop on the Blue Line Extension light-rail line, located at the intersection of North Tryon Street. It requires approval from the zoning commission, a process already begun by the university.

Of the $84 million construction cost, a portion of existing tourism taxes would account for $8 million. Council would have to approve the visitors authority’s funding for the hotel. A vote is anticipated at the Aug. 27 council meeting.

All but $2 million of the remaining $76 million would come from the UNC Charlotte Foundation. The foundation would provide its portion by issuing $45 million in bonds, contributing $9 million in cash and raising $20 million through private investment. Marriott would kick in $2 million. 

The hotel will be a 226-room Marriott with a 24,000-square-foot conference center and a 132-space parking deck.

Dubois and visitors authority consultant Ron Kimble told council the conference center is twice the size of what similar-sized hotels usually build. The reason: Anticipated demand for academic conferences and other events driven by the on-campus location.

The visitors authority based its proposed investment in the project on the likelihood of campus conferences and meetings creating demand at nearby hotels in University City, potential bookings for large conventions in uptown because of the easy light-rail proximity carrying convention-goers from the campus hotel to uptown and simulcast connections to UNCC’s center city campus spurring more activity at both sites.

Part of the arrangement would include an ownership share for the visitors authority in the conference center’s ballroom and meeting rooms. Terms of that agreement with the university have yet to be negotiated. UNCC’s foundation would own the property and be responsible for its operations and maintenance.

Others involved in the project include the university’s trustees board, Stormont Hospitality (development manager), Sage Hospitality (hotel operator), Cooper Carry (architect), Balfour Beatty (general contractor), Hilltop Securities (financial advisors) and Jones Lang LaSalle (market analysis).

The $1.2 billion light-rail line connecting UNCC’s main campus and uptown along a nine-mile route opened in March, better connecting the school with the city’s central business district. Backers of the hotel and conference center believe this project will help the tourism sector and UNCC.

Based on estimates and analysis compiled by the university’s advisors and partners, the hotel and conference center would add $9 million combined in local and state taxes while creating 210 jobs. Projections for the hotel in its seventh year of operation include $13 million in room revenue, $5.5 million worth of food and beverage sales and a room-occupancy rate of 73.5%.

“This is a unique new addition to the tourism landscape,” Kimble told me Monday. “It’s a unique hotel that would have conference center on the light-rail line at the front door of the university on North Tryon Street and it would be digitally and electronically connected to the uptown campus building and to the convention center.”

Dubois, the chancellor, told CBJ it’s taken several decades for the conditions at and around UNCC to make the hotel project viable.

Growth in University City, surging enrollment near 30,000 students and the light-rail line opened this year make a more powerful case for building the hotel.

“Our argument is we can make all boats rise by trying to attract to the region, to University City and the campus, organizations that typically don’t come to Charlotte now because we don’t have a campus-based hotel,” Dubois said. “That was the case I’m making and (council will) have a month to think about it.”

If council approves the project by the end of summer, plans call for construction to start in January. The hotel would open in August 2020. 

Also at the council meeting on Monday, members unanimously approved a $20 million police station to be built uptown — a project deferred two weeks ago when some members grew frustrated over existing diversity contracting programs.

Since then, council’s economic development committee has expanded its scrutiny of those programs while also deciding not to hold up the police station any longer. Local firm Edifice landed the $20 million contract on Monday and will build the three-story, 31,000-square-foot station at West 5th and West 6th streets.

Ed Driggs, a council Republican, said that approving the project this week signaled to the business community the city won’t seek to change terms after a deal is negotiated. Previously, some on council hoped to revamp the diversity program in time to apply new standards to the CMPD station.

“We can’t stop everything” until the new standards are finished, Driggs told me.

Council moved ahead with a $20 million project connecting Bojangles’ Coliseum and Ovens Auditorium on Monday, approving Barnhill Contracting as the construction firm. Of that amount, construction accounts for $17 million of the budget with the rest going to design fees, pre-construction and other expenses. Odell Associates is the architect.

Bojangles’-Ovens and the CMPD uptown station have goals of 14% participation for small businesses and 10% for minority-owned firms. Work on the connector building will start later this year and finish in early-2020; the police station has an anticipated opening date of mid-2020.

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Changes Made to Law Requiring Hotels to Display Human Trafficking Posters

As the NC General Assembly enters the final stretch of its 2018 short session, the North Carolina Travel Industry Association went to work (at CAHA’s request) on a modification to a 2017 law requiring hotels, restaurants and welcome centers to display a controversial human trafficking poster in their lobbies. The law required every hotel and restaurant that holds an ABC permit to display the posters in plain view of the public. While CAHA firmly supports any initiative that helps to prevent human trafficking, the signs did not display a message of welcome and hospitality.

NCTIA and CAHA worked with legislative leaders to modify the language in a new bill, Senate Bill 335 (Budget Technical Corrections and Study). The new language now reads: All permittees shall prominently display on the premises in a place that is clearly conspicuous and visible to employees and the public a public awareness sign created and provided by the North Carolina Human Trafficking Commission that contains the National Human Trafficking Resource Hotline information.

Senate Bill 335 passed the Senate on Wednesday and was approved by the House on Thursday. The bill is now on Governor Roy Cooper’s desk and will likely take effect without a veto. Barring a veto, the law will now limit the requirement to back-of-the-house display in plain visible view of employees.

CAHA leadership is currently meeting with the CMPD to gain a better understanding of the human trafficking issue as it relates to our community and how we might further support initiatives that bring an end to human trafficking. More information will be shared at the CAHA General Manager’s meeting on July 16, 2018 at the Ritz Carlton. General Managers can RSVP online at http://www.charlotteareahotels.com/meetings/.


Kessler CEO talks plans for $110M luxury boutique hotel in uptown


Expect this $110 million boutique hotel to bring a little sparkle — and funk— to uptown.

Construction is officially underway on the Grand Bohemian Hotel Charlotte. Plans call for that 254-room, 15-floor hotel to open in March 2020.

A groundbreaking was held Thursday, but this is a project three years in the making, says Richard Kessler, CEO of The Kessler Collection. 

Kessler has been hands-on in the entire process to bring the Grand Bohemian to Charlotte, from choosing the city and site to working with designers on the project.

“What we’re building will be here for decades. We’re adding to the city and skyline for decades to come,” Kessler says.

He was drawn to the Queen City because of its future potential — and need for a unique hotel. Expect classical architecture and contemporary touches — all with an Argentinian flair.

“We’re not creating hotels. We are creating entertainment centers,” Kessler says. “It’s a piece of art.”

That Orlando, Fla.-based hospitality company acquired a 0.6-acre site next to the Carillon Tower at Trade and Church streets in 2015 for a little more than $3 million. 

The hotel will have 32 suites. An open-concept restaurant will bring the flavors of Argentina to Charlotte with a steak-oriented menu. 

A lounge and bar with sidewalk and park seating as well as a Starbucks are planned.

The 16th floor will be home to a rooftop bar with views of the Queen City.

It also houses the signature Poseidon spa with services such as hot stone massage, lavender peppermint scalp treatment and aqua gel facial masks in addition to a 24-hour fitness center with cardio machines and custom-programmed music.

here’s also 18,000 square feet of customizable meeting space for everything from corporate functions and holiday parties to weddings. That includes a mix of indoor and outdoor space with three breakout meeting rooms, a private dining room, a 4,400-square-foot ballroom and as well as a rooftop terrace.

Think hundreds of pieces of dynamic art throughout the hotel. (Side note: Kessler himself buys that art.) 

Expect rooms to cost in the $300 range, Kessler says.

The Grand Bohemian flag is part of Marriott’s Autograph Collection.

The Kessler Collection’s portfolio includes nine luxury boutique hotels, including sister properties in Asheville and Charleston, S.C.

“People really enjoy our hotels because we do something different than anything in the marketplace,” Kessler says. “In most cities we’ve been in we’ve been the No. 1 market leader.”

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Site for 1,000-room Charlotte convention hotel to be selected this summer

A city consultant and the CEO of the Charlotte Regional Visitors Authority said Monday that discussions on a 1,000-room convention hotel will likely shift to selecting a site and beginning talks with prospective developers this summer. Those plans surfaced during a presentation to City Council that outlined anticipated funding needs for a slew of projects in the next five years to be paid for using existing tourism taxes.

Tom Murray, the visitors authority executive, last year told CBJ and industry leaders that a convention hotel would make Charlotte more competitive when recruiting conferences and conventions. He reiterated on Monday the need for a large-scale hotel under the tourism arm’s control, allowing the city to contract large room blocks at discounted rates to attract conventions.

Though he declined to disclose specific sites, Murray said it would be preferable to locate land adjacent to the convention center. The convention center, opened in 1995, is located on College Street, bounded by Stonewall and Brevard streets and Martin Luther King Jr. Boulevard.

Former city manager Ron Kimble, who has consulted on tourism projects since his retirement in January 2017, told council, “We also have had conversations with you, with the community, that have been in the media regarding the need for a 1,000-room hotel that would rise all tides and raise all boats in the hospitality industry and bring new, bigger conventions to Charlotte.”

No specific amounts were mentioned, but, based on precedents established in similarly sized cities, public money would likely account for 30% or more of a convention hotel. Assuming 1,000 rooms, construction would be in the range of $350 million, meaning $100 million or more could be sought from taxpayers.

Rival cities including Austin, Baltimore, Cleveland, Indianapolis, Louisville and Nashville have all planned or opened similar projects with significant public money.

“We’ve got make sure we stay competitive in the marketplace,” Kimble said. “There will be an action coming to you sometime this summer regarding the opportunity to partner on an upgrade to the convention center that will also involve the possibility of a new 1,000-room hotel.”

Last year, council approved spending $110 million on convention center renovations and expansion to be repaid using a portion of existing tourism tax revenue. A final vote on the construction contracts will be taken this fall. 

Construction is slated to begin next winter and be finished in 2021. 

Murray emphasized in a discussion with reporters after the presentation that no agreements have been reached with a hotel developer. A site idea will likely be brought to council later this year.

In a presentation last year to industry executives, Murray and others asserted a convention hotel would help existing hotels, citing industry data from rival cities that have recently opened similar projects. The visitors authority CEO pointed to 93 consecutive months of industry growth in Charlotte as proof there is enough demand to absorb a 1,000-room hotel. 

The city’s first convention hotel, a 700-room Westin, opened in 2003. City money accounted for $16 million of that project’s $143 million cost. In return, city government received use of 500 of the 1,600 parking spaces in an adjacent deck as well as some of the hotel’s conference rooms.

“Ideally, it would be adjacent,” Murray said of a 1,000-hotel room. No hotel brands or representatives have been contacted yet, he added.

Charlotte has seen a proliferation of new hotels opened or planned in recent years, including an increase of 5.6% in the number of rooms during the past year.

The city is considered the likely choice to land the 2020 Republican National Convention since other anticipated contenders declined to submit bids. Last year, Charlotte hosted the PGA Championship and, in February 2019, the NBA All-Star Game will be here. The Democratic National Convention came to Charlotte in 2012.

Murray said those successes point to more growth and opportunity in the years ahead — opportunity that requires more rooms and convention space to be fully realized. LaWana Mayfield, a council Democrat, wondered aloud why public investment is needed when private companies are already building hotels without government investment or encouragement. Kimble referred to the need for the visitors authority to have control of blocks of rooms in one location at reduced prices, an offer that is much easier to make for a subsidized hotel.

“You have spent wisely, you have spent and invested strategically,” Kimble told council during his presentation, summing up tourism tax spending commitments. “You’ve invested where you get the greatest return on the input of the revenues for the assets built. I would say past City Councils have been extremely, extremely successful in creating return on investment.”

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Charlotte's booming restaurant scene fuels rising wages

The competition for talent is on as more restaurants stake out their place in Charlotte’s fast-growing dining scene. A shallow labor pool is driving up wages and causing restaurateurs to re-examine benefits and perks to retain employees — all at the cost of the bottom line.

“People are really struggling to fill basic-level positions,” says Kris Reid, executive director of the Piedmont Culinary Guild. “There’s just not enough bodies.”

Reid herself formerly worked as a chef. 

The guild works to promote 248 local chefs and farmers, encouraging them to showcase the flavors of the Piedmont by keeping their supply chain local. But rising employment costs are taking a toll on that effort as restaurants balance customer expectations for quality with pricing pressures.

A search of Indeed.com produced more than 4,000 restaurant job opportunities here, with options available from fast food to upscale dining.

Operators are going to be forced to think outside the box on hiring, Reid says. For example, the guild is exploring community dinners instead of traditional job fairs with a goal of highlighting food and beverage as a fun, community-based industry.

“We’re sort of in a labor crisis. Everyone really is struggling and trying to find a solution,” Reid says. Currently, 38% of all restaurant operators nationwide report recruitment and retention of labor is a top concern, says Hudson Riehle, vice president of research for the National Restaurant Association. “With a growing number of restaurants, obviously the underlying labor supply has tightened,” Riehle says.

One out of every 10 jobs in the United States is in the restaurant industry where employment is expected to top 15 million in 2018.

Hiring has always been a challenge. Now, that’s heightened by increased competition for employees and a shift in workforce expectations, says Frank Scibelli, founder of FS Food Group. 

For example, these days it’s harder to find employees who want to work nights and weekends while missing time with friends and family. 

“We’re trying to get more progressive because it’s not going to go away,” he says.

His Charlotte-based restaurant group employs roughly 500 at Midwood Smokehouse, Paco’s Tacos & Tequila, Yafo Kitchen and Mama Ricotta’s.

Wages are up about 10% in the past few years. The company has added perks such as a 401(k) program, paid vacations, meals and discounts to sister concepts to help attract talent. 

FS Food Group has a progam that pays prospective employees to come in for the day and shadow staff.

“We want it to be a fit our way as well as theirs,” Scibelli says.

He’s seen that new staff requires more training and better communication. Employees learn early about paths to potentially advance their FS Food Group careers, he adds. “It’s not all glamorous work,” Scibelli says. “It’s a tough job. But the people who love it here stay forever.”

It doesn’t hurt that wages in the restaurant industry have risen faster than anywhere else in the private sector, Riehle says. That gives employers another tool to increase recruitment odds and retain staff.

That wage growth is backed by Indeed’s job listings. Job posts with wages listed topped North Carolina’s minimum wage of $7.25. 

The soon-to-open Brewers at 4001 Yancey is looking for line cooks, prep cooks and dishwashers. The pay? $10 to $14 an hour. DeSano Pizzeria Napoletana had listings in the $12-to-$15 range for bartenders and servers. And Eddie V’s in uptown was offering up to $18 an hour.

An experienced line cook at the soon-to-open Superica can earn up to $20 an hour, says Andy Palermo, senior general manager at Ford Fry Restaurants’ Tex-Mex concepts.

The Atlanta-based company enters the Charlotte market later this month with a 7,000-square-foot restaurant in South End.

But it’s not all about the pay. Full-time employees are eligible for paid-time off, health benefits and other perks. There’s also a path for development and growth within the company, Palermo says. “People are interested in hearing what’s in it for me. We’re really strongly committed to creating a great working experience for them.”

He says well-themed job ads and targeted recruiting trips were key in lining up staff. Superica will have up to 110 hourly employees.

Duckworth’s Kitchen & Taphouse recently revamped its Park Road location. A trimmed-down menu and new seating layout helps increase functionality in the kitchen, says Kevin Stevens, district manager and operating partner for Duckworth’s.

It also makes it easier to deal with staffing challenges.

Gone are the days of applicants walking in the door in search of a job. Stevens says that for every 17 contacts he gets off a job board, one applicant may show up for an interview. “You can definitely tell there’s a change in the workforce. It will be interesting to see how it evolves.”

A recent Duckworth’s ad offers to pay $1 more an hour if an employee brings employment verification. It also gives employee bonuses for referring new hires. “That’s pretty much how competitive it has gotten. You really hate to steal someone from someone else,” Stevens says.

H.P. Patel, co-founder of Tandur Indian Kitchen, says his biggest challenge was lining up a staff while still under construction in SouthPark. “Labor is tight. Employees don’t want to wait for construction to end. They want a job now.”

Tandur invested more than $1 million into its first location here, which opened last month.

The fact this is a new concept to market exacerbated the challenge. Tandur aims to make Indian cuisine more mainstream, but that comes with its own issues. “People can’t wrap their head around an Indian restaurant, fast casual and how does this all work,” Patel says.

Hourly positions can pay up to $12, depending on position, with tip sharing as well. But he says creating a culture for employees is most important.

Having a fun work environment can help staff deal with busy times and improve the overall customer experience, too. “If you’re having fun, it’s a completely different experience,” Patel says.

The Restaurant Association’s Riehle says it is critical to deliver on the dining experience as consumers spend more food dollars eating out.

Today, roughly 48% of the food dollar is spent in restaurants — up from 25% in 1955.

“If that last restaurant experience for the patron doesn’t meet their value received for price paid, then they can be quite quick to vote with their feet,” he says.

Operators are forced to balance rising wages with customer expectations and the bottom line. 

Restaurateur Jon Dressler estimates he’s paying staff up to 30% more than five years ago.

“Wages have increased — and we like that,” he says.

His Rare Roots Hospitality Group employs roughly 250 workers across five restaurants. His most recent venture, Fin & Fino, opened last month in uptown. 

Dressler and wife Kim invested more than $1 million into the social seafood house concept.

He concedes higher wages are not good for the bottom line, but restaurant workers have been underpaid for years. Too often the restaurant industry is seen as a stepping stone instead of a career, he adds.

“We provide a real job. We work real hours, we make real money,” he says. “The restaurant world is a passion. It’s something that’s in your soul, your fiber, your being.”

Dressler says he’s escaped many of the pitfalls tied to hiring by creating a culture that puts family first and inspires loyalty. Current employees can vouch for potential hires — a recommendation Dressler takes to heart— and management is promoted from within when possible.

“Our growth has always been very strategic and centered around our people,” he says.

Operating multiple restaurants allows him to invest in training and set expectations in advance of a new restaurant’s opening. That translates in the hospitality, service and overall experience Rare Roots establishments can offer, Dressler says.

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Passengers at Charlotte Douglas can catch some shut-eye as new sleep pods set to open


A new concession at Charlotte Douglas International Airport will soon allow passengers to recharge their batteries in between flights.

Minute Suites announced last summer it had signed on to add six pods — each about 56 square feet — and a shower at Charlotte Douglas. The company is set to open with a grand-opening event scheduled for May 1.

Minute Suites is located at CLT's atrium area, just past the security checkpoint areas in the central part of the airport. The pods, which were slated to open at the Charlotte airport back in December, are equipped so that travelers can nap, watch TV or use a computer as well as work in a private space. They'll be open 24 hours a day.

Travelers can pay $42 to book a suite for a minimum of an hour. The rate for additional use in 15-minute increments is $10.50. The cost of booking a suite in eight-hour blocks ranges between $140 and $160. A separate fee is charged for shower usage. For a complete breakdown of pricing, click here.

This marks the fourth airport for Minutes Suites. It's also at Hartsfield-Jackson Atlanta International Airport, Philadelphia International Airport and Dallas-Fort Worth International Airport.

In the midst of a major 10-year, $10 billion overhaul, the Charlotte airport is in the process of revamping its concession mix. That includes an Olde Mecklenburg Brewery bar kiosk at Concourse E and a full-service restaurant and taproom by NoDa Brewing Co. that's set to open this summer.

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Hotel with rooftop concept coming to former Kimpton site in Dilworth

A Charlotte-based hospitality development group has plans to build hotels in two prominent locations in the Queen City.

OmShera Hotel Group acquired the roughly 1.2-acre site at East Worthington and Cleveland avenues in the fall and will develop a six-story, 135-room Courtyard by Marriott hotel there. The site, in the Dilworth neighborhood, was previously planned to be a 128-room Kimpton hotel but those plans fell through. OmShera purchased the site from Catellus Group for $3.9 million in October.

Kush Anandani, director at OmShera Group, said the Dilworth hotel will be a custom Courtyard as opposed to a more prototypical hotel. He said the hotel will be a very similar design as what was approved in Catellus' rezoning a few years ago, in which the hotel group worked closely with the Dilworth neighborhood.

Anandani said the hotel will have an "urban, local community" feel. It will include a roughly 5,000-square-foot rooftop restaurant/bar concept that Erin Zitelli-Davis at The Chambers Group is marketing on behalf of OmShera, Anandani said.

"We’re definitely looking for a local concept and something that brings out the flavors of Charlotte and Dilworth," he added.

The Courtyard is expected to break ground by the end of this year, with a projected opening in the spring of 2020, Anandani said.

CAHA Continues to Expand Jobs Initiative through Partnerships

Represented by 10 member hotels, the Charlotte Area Hotel Association participated in the City of Charlotte’s Career Discovery Day on April 17th at the Charlotte Convention Center. Participation is part of our ongoing initiative to introduce and educate the next generation of employees about careers in the Charlotte hospitality industry. More than 4,000 students looking to enter the workforce representing 36 Charlotte Mecklenburg Schools were exposed to several “Industry Zones”—Hospitality being one of the few private-sector zones among the more than 100 vendors. Big thanks to the CRVA for lending us the “Partners in Hospitality” archway, which helped Charlotte's hospitality industry stand out in a crowded hall.

CAHA member hotels displayed career opportunities with the students who are hungry to find their path. The message was consistent throughout the day—hospitality is the industry of upward mobility; come in with a good attitude and willingness to work hard, and you can create a successful, long term career.

Moving forward, CAHA has several plans in place to strengthen its' hospitality jobs initiative. An employee recruitment video, filmed locally last month is in the final stages of editing. It features young hotel employees, all in supervisory or managerial roles, who shared personal experiences of upward mobility in the hospitality industry. All started in line positions but found opportunity and training to progress in their careers. "The best way to share an upward mobility story to young adults is for them to hear from young adults who are not too removed from initial career decisions," said Vince Chelena, CAHA executive director. "We captured stories from amazing employees who truly believe they have found a career in hospitality. Through a partnership with CMS, graduating students will be exposed to the hospitality industry as a great place to work and grow professionally."

If you were not able to participate in the Career Discovery Day this year, there is another opportunity on the horizon to showcase our industry to the next generation of young leaders. The Mayor’s Youth Employment Program will be hosting their Summer Kickoff Event in June at Spectrum Arena. Executives from different industries will be present to coach students on interviewing, career readiness training, and other career building skills. CAHA will again be represented through its' member hotels. More information about the job fair will be coming soon.

"We tip our hat to the Mayor’s Youth Employment Program and CMS for putting together an incredibly successful event," said Chelena. "We look forward to continuing our partnership with both organizations and introducing students and career seekers to Charlotte's hospitality industry."  

Why Charlotte's proposed amateur sports center is back to zero

A long-sought indoor amateur sports center for Charlotte may not be dead, but, at minimum, it’s in intensive care. This week the economic development committee accepted a recommendation by city administrators to decline all three proposals submitted by potential developers and investors to build a field house using a combination of private and public money — a move that eliminates any imminent prospects to expand the local lineup of sports venues.

The committee’s decision marks the latest setback for tourism executives, politicians and others in Charlotte who want to strengthen the city’s recruiting pitch for amateur sports championships and tournaments. 

According to the Charlotte Regional Visitors Authority, a publicly funded agency that recruits conventions and other events, amateur sports accounted for 59% of its overall bookings in 2017, adding $133 million worth of visitors spending. Despite that success, rival cities in the Southeast, including Birmingham, Myrtle Beach and Atlanta, have invested much more heavily in indoor and outdoor sports complexes in an aggressive campaign to woo amateur sports events.

Three groups submitted bids for the proposed fieldhouse: Universal Sports, Eastland Community Development and Charlotte Flights. A combination of city government and visitors authority executives reviewed the proposals and determined none met the bid requirements. One obvious sticking point: None of the groups controlled property where a fieldhouse could be built. 

Universal Sports proposed a 176,000-square-foot facility plus an outdoor track, but didn’t disclose a construction cost or a city funding request. (The city has set aside as much as $15 million to help build an indoor sports center.) Eastland Community Development targeted a 13.4-acre site for an unspecified-size fieldhouse and an outdoor track with a price tag of $35.2 million. Of that amount, the city would have contributed $15 million, according to the bid.

Lastly, a group billing itself as Charlotte Flights touted a 430,000-square-foot, $40 million sports center, again with an outdoor track, and asked for $20 million — or 50% of the building cost — from the city.

Randy Harrington, the city’s chief financial officer, and Bill McMillan, senior director of sales at the visitors authority’s recruiting arm, told committee members this week that none of the bidders have experience building these types of projects.

Ed Driggs, a Republican councilman and vice chair of the committee, told Harrington, “I really appreciate the fact that you have just said no. In this case, I think no is a good answer.”

Mayor Vi Lyles, a Democrat, told council members earlier this month the criteria for a fieldhouse might need to be changed because of disappointing proposals submitted. Council Democrat and committee member LaWana Mayfield asked Monday whether private-sector projects and others steered by Mecklenburg County park and rec may have reduced or shifted what’s needed in Charlotte to attract more amateur sports events.

“I think we need to regroup on our strategy,” committee leader James Mitchell, a Democrat, told me Tuesday. “How do we go out in the market and regroup? We need to keep this on our agenda, but we need to close the loop on our (bid) process.”

For the past five years, the economic development committee has tried to help the visitors authority increase sports tourism by adding an indoor center suitable for staging basketball and volleyball tournaments as well as sports such as wrestling, karate and cheerleading competitions. 

Previously, city-owned land adjacent to Bojangles’ Coliseum and Ovens Auditorium on Independence Boulevard was the preferred site for an indoor sports center. In 2013, Florida developer Good Sports reached an agreement with the city to build a 115,000-square-foot field house and a 150-room hotel, but couldn’t pay for the project even after the city allowed the developer to reduce its investment.

Later, the city adjusted its site preference, opening up the latest round of bids to almost any place other than Bojangles’-Ovens, which will likely need the adjacent space to make room for a light-rail line.

Hotels, restaurants and other tourism-related businesses love amateur sports because the events tend to occur on weekends, supplementing weekday corporate travel. In addition, parents and other relatives who support young athletes tend to be intensely loyal, making such travel all but recession-proof.

Here and nationally, travel related to amateur sports, including the popular travel leagues that thrive on higher-level and more frequent competition for school-age children and teens, has become a $10.5 billion-a-year industry, according to figures compiled by the National Association of Sports Commissions.

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Raleigh hospitality group buys part of uptown block slated for hotel development

Another project could soon rise in uptown's First Ward following a recently closed land transaction.

Concord Levine Hotels LLC, affiliated with Raleigh-based hotel group Concord Hospitality Enterprises, recently purchased a 0.4-acre parcel at the corner of North College and East Eighth streets from LMC, the multifamily arm of Lennar Corp. (NYSE: LEN) that's developing a 549-unit apartment project on that same block. The portion of the site that Concord Hospitality acquired last week for $3 million was anticipated for hotel development, as previously reported by the Charlotte Business Journal.

Multiple attempts to reach Concord Hospitality for more details by deadline Thursday were unsuccessful.

Concord Hospitality has nine hotels in North Carolina listed as part of its portfolio, including the Homewood Suites by Hilton Charlotte Airport hotel on Yorkmont Road. Its other N.C. hotels are in Raleigh, Durham and Beaufort, though it's developed and owns hotels nationally, primarily on the East Coast.
LMC isn't breaking ground on its mixed-use project until later this year. It will include a 33-story high-rise with 365 units and a six-story, 184-unit midrise, as well as about 20,000 square feet of ground-floor retail fronting the Lynx Blue Line. LMC's project will occupy the rest of the block, which is bounded by East Eighth, North College and East Ninth streets and the light-rail line.

Concord's project will join a number of other hotel projects in the works or under construction in uptown. An Even Hotel and Home2 Suites by Hilton are underway now next to Novel Stonewall Station at Caldwell and Stonewall streets. Not far west, Crescent Communities recently appointed White Lodging as its hospitality partner at the Ally Charlotte Center block at Tryon and Stonewall streets, though a hotel flag has not yet been confirmed for that site. Vision Ventures and McKibbon Hospitality are nearing completion on the dual-branded AC Hotel and Residence Inn Charlotte City Center at the EpiCentre, which will add 300 rooms to uptown's hotel inventory. The Kessler Collection has begun construction on the 254-room Grand Bohemian Hotel at Trade and Church streets, and Valor Hospitality Partners and SB&G Group are developing a 270-room InterContinental Hotel at the Carolina Theatre site on North Tryon Street.

Expect more office space, housing and hotel rooms in center city's future

A lot more office, housing and hotel rooms are coming to Charlotte's center city, even in a long cycle that's been marked by overall strong performance across all real estate sectors.

That's according to the 2018 State of the Center City, an annual report by Charlotte Center City Partners that analyzes growth and development in Charlotte's urban core during the previous year as well as what's expected next. Data in the report examined uptown, South End and a portion of midtown.

Some of the key numbers from 2017: 1.4 million square feet of office space, 1,847 apartments and 713 hotel rooms opened in the center city.

Looking ahead, there's currently 5.1 million square feet of office space planned or under construction in center city in addition to 840,000 square feet of retail, 8,363 housing units and 2,276 hotel rooms.

Michael Smith, president and CEO of CCCP, said it's notable that there's growth across multiple real estate sectors — not strictly confined to just offices or apartments, for instance. He said that's likely because of pent-up demand and that the current development cycle has been marked by a cultural and demographic shift to the urban core, much more than in previous cycles in Charlotte.

Here's a look at a few key takeaways from the 2018 State of the Center City:


Although office development started fairly late in this cycle, Charlotte's center city is on track to deliver about as much new office space as the past few cycles.

"If we’re able to deliver 5 million to 7 million square feet (of office) per decade, it positions us to be able to respond," Smith said. "In the ‘80s, the ‘90s, the aughts, (development) was all bank-driven ... every three or four years, they would build a new tower, take half of it and then we’d have that inventory."

New office construction in this cycle is more developer- and institutional capital-driven. But buildings like 300 South Tryon and 615 South College that have been built by developers and investors have had strong demand and pre-leasing, Smith noted.

"I think that shows well for our market, which should help with asset values as some of these buildings are traded among institutional investors and, hopefully, this becomes our cycle where we prove our viability to institutional investors," he said. "Every cycle comes to an end; we just want them coming back for the next cycle."

The Blue Line that opened in 2007 has spurred billions in development along the rail line, with most of that new construction in South End being apartments. More recently, the neighborhood is seeing more density and mixture of uses being built — 500,000 square feet of office is planned or under construction.

"I think that the office market in South End is one that we’ve been anticipating for awhile, particularly from 277 down to the Camden/Tryon split," Smith said. "We believe that portion will develop much more like the CBD but it will have its unique South End and Gold District flair."

He cited Beacon Partners' RailYard project, under construction now, which includes 300,000 square feet of office space and 30,000 square feet of retail space. Smith said that project will be the new standard rather than the exception for office development in South End.


With nearly 2,000 new apartments opening in Charlotte's center city last year, 2017 was the busiest year to date for downtown's multifamily market.

Today, there are about 30,000 people living in center city, a growth of 600% since 1998. Much of that can be attributed to the urban apartment boom that's been a key theme nationally in this development cycle.

But because of high demand and quick absorption in the multifamily market here, rental rates are skyrocketing. The average monthly rent in center city is now $1,640, according to the report.

"If I were to identify anything that we need to be concerned about right now, it’s probably the affordability side of things," Smith said. "We don’t have a San Francisco, New York City, Washington kind of crisis, but we’re moving in the wrong direction and we’re going to push the lion’s share of our workforce into commute patterns that are unsustainable."

He said a report will soon be released detailing the findings of a task force, comprised of experts in affordable housing, that gives recommendations on new ways the private sector can build or preserve affordable units.

Smith noted that a lot of naturally occurring affordable housing in or near the CBD is being razed for new, oftentimes expensive, housing — or apartment owners embark on renovations at older properties that ultimately bump rents up 30% to 40%.

"We’ve got to find ways to preserve those long-term," he said.


Hotels continue to see demand in center city, with several projects having wrapped up in 2017 — the Kimpton Tryon Park Hotel, SpringHill Suites by Marriott Charlotte Uptown and Embassy Suites by Hilton Charlotte Uptown among them — but several more are underway or planned.

The occupancy rate in Charotte's center city is at 72%, according to the CCCP report, and more than 2,000 rooms are proposed or being built now. More than 800 rooms are anticipated to be added to the market in 2018.

"The average daily rates continue to climb yet when you look at what is paid in Nashville and in Austin, we’re still a relative value," Smith said.

There's been buzz recently about whether a convention center hotel, which contains between 800 and 1,000 rooms, is in Charlotte's near future. Such a hotel would cost hundreds of millions and likely require some type of public investment.

Smith said building a convention center hotel is a "best practice" for cities hoping to be a destination and necessary to compete with other major cities.

"When you look at the research, what’s proven out is that (a convention center hotel) raises all boats," he said. "It is actually in the best interest of other hotel operators because the entire market’s (revenue per available room) rises after that kind of a move."


Every development project along Stonewall Street — which encompasses nearly $3 billion in real estate activity — includes some amount of street-level retail, including uptown's first full-sized grocery store, Whole Foods Market, which is opening later this year near Stonewall and Caldwell streets.

In South End, Asana Partners has acquired several buildings in what's being called the Design District — in close proximity to and including the Design Center of the Carolinas — and Edens is redeveloping Atherton Mill. Both firms are investing significant capital into renovating and adding new retail space.

"The front part of this interest of retailers is being led by ... food and beverage and entertainment," Smith said, adding that soft-goods retail will come after retail has become more established. "As I’ve talked to developers and retail consultants in the past, retailers want to locate to places where their customers are already shopping."

Owners of older office buildings in uptown have also spent significant capital in refitting ground-floor lobbies into new restaurant and retail spaces, driving tenant activity and ultimately pushing per-square-foot rental rates.

Economic development

There are lots of corporate prospects "poking around in the market," Smith said, adding that while House Bill 2 — a controversial state law enacted from March 2016-17 and credited with stalled economic development efforts — was hard on inbound activity, it's important for Charlotte to be intentional about telling its story.

Charlotte was not a finalist city for Amazon's second headquarters, which promises 50,000 jobs and $5 billion in economic development over the next decade. Twenty cities made a short list for the project, including Raleigh. The Charlotte region not being on the list was "surprising and disappointing," Smith said, adding that he thought Charlotte would have been in the top 10.

"When you looked at what was on that list of the things that Amazon valued, I thought it lined up really well with the things that we’ve prioritized and invested in over the last few decades," he said.

He added that the process of pursuing Amazon HQ2 was a "worthwhile exercise" to figure out why Charlotte didn't compete as well as other cities and to think about what the region needs to concentrate on and invest in looking ahead.

Ashley Fahey
Charlotte Business Journal

View the full article here

Airbnb lashes out at Marriott as clash between Silicon Valley and the hotel industry intensifies

So much for holiday spirit. Airbnb and the hotel industry are lashing out at each other, just as the travel season kicks into gear.

On Monday, Airbnb's head of public policy Josh Meltzer sent a letter to Marriott CEO Arne Sorenson, asking him to explain to Americans "your industry's habit of taking billions of dollars from taxpayers to subsidize the construction and operation of your hotels."

The letter, a copy of which CNBC obtained, follows a Fortune interview with Sorenson last week. In it, Sorenson was asked if he thinks Airbnb has become more willing to make concessions or cooperate with regulators.

"I don't know that I see that they're more willing to concede," Sorenson answered. "They're spending a lot of money on government affairs and they're playing pretty aggressive. I've had letters from Airbnb directly, demanding my response about some charge, I don't even know what it is, within hours. That's pretty aggressive, and I'm not going to respond to that."

It's the latest phase in a tit-for-tat battle being waged in public and in the press between the Airbnb and hotels. We reached out to Marriott about Monday's letter but didn't immediately hear back.

The clash of the Silicon Valley technology disruptor and the old, slow-moving industry has been raging for years and only intensifies as Airbnb gets bigger and more influential. The hotel industry has long claimed that Airbnb skirts laws around taxes and real estate use, while Airbnb has said that hotels are doing everything in their power to protect their turf at the expense of consumers and taxpayers.

Earlier this year, an internal American Hotel & Lodging Association (AHLA) document was leaked, detailing the hotel industry's plans for limiting the growth of short-term rentals and the platforms that enable them, naming Airbnb as a threat. Marriott, Hilton and Hyatt are members of the group.

Over the summer, an ad campaign backed by the Hotel Association of New York City suggested that short-term rentals could be used to host terrorists. Airbnb countered with an ad featuring interviews of a host claiming that the home-sharing platform helped him earn additional income.

'Misleading advertisements'
Meltzer wrote in the letter that he read the Fortune interview with interest and said that Sorenson is "unwilling and unable to defend your industry's longstanding commitment to price gouging consumers, depressing wages and replacing workers with robots."

Meltzer went on to say that many of Marriott's hotels are "magnets for bad actors" and he asked Sorensen why a hotel association "has chosen to launch a series of misleading advertisements regarding safety and security."

The letter also got personal, suggesting that taxpayers have not only subsidized the construction of Marriott's hotels but also helped fund the almost $12.3 million Sorenson was paid in 2016.

Read the Airbnb letter

View the full article here

Kimpton CEO on hotel company's future, including Charlotte expansion

When did Charlotte first come onto Kimpton’s radar as a market for expansion?

When we first started considering Charlotte, we were considering a broader approach to this area of the country. We recently developed in Savannah and Nashville and Winston-Salem, and others started to show up in this radar. Charlotte became a very natural target for us. This is among the hot growth cities in the South, the South being such a great place to be right now.

We’ve been partners with the Barings company and their other iterations for the past 20 years. When we started talking about this, they wanted to do something that was completely individual and completely unique to their project. They wanted to influence it and we’re the sort of brand that welcomes that — that collaboration is important to us and important to the partnership, and to make sure that it works within the market.

But we’ve noticed especially when you’ve got a local developer with a local group of people, they really do know what the market wants, what the market needs. We riff off of that, take their inspiration and try to turn that into the business model that is our hotels and restaurants and rooftops and all the other things we do.

When you heard about Barings’ involvement in 300 South Tryon, was that when it initially occurred to Kimpton to put a hotel here, too?

Barings brought us in to be the hotel operator, but we start three years out before the hotel is built so we can be a part of that inspiration and creation.

We take it at a very textual level and they brought us in for that reason. We’re not brand-heavy; we’re property-specific heavy. That’s our focus, to make sure that we create something completely unique. We have a hotel down in Winston-Salem that is in a historic landmark building. We love not being typecast into one sort of hotel or one attitude or point-of-view.

Looking at Charlotte’s hotel market as a whole, do you believe there’s room for growth and diversification here?

I think that a lot of the hotels in this market have done some of their own repositioning and renovations and upgrades over the past several years. Sometimes that’s natural, sometimes that’s in response to new inventory coming on, but it’s all good for the city and the stock in the city. The occupancy is strong here, the corporate market and the demand generators that fill hotel rooms on Tuesday nights are very strong here. And then the leisure elements in Charlotte continue to, frankly, outperform many other markets ... there’s a tremendous demand for weekend business. What I’ve seen is a fairly consistent rate strategy that goes across the different days of the week and it stays strong and perpetual throughout the seasons of the year, too. A lack of seasonality and a strong leisure and strong corporate market make for a great hotel market.

There’s a lot of markets in the country that are a little bit oversaturated. This, we don’t think, is one of them. We think there’s room certainly for hotels, especially for boutique hotels and design-driven hotels like ours, and certainly the restaurant market in this town is still robust and people love to party and eat and drink and celebrate. Those are places we like to be

Do you see future growth here in Charlotte for Kimpton?

We’d love to. We don’t have anything on the docket at the moment but it’s our goal when we go into a market to find submarkets and sublocations, and go into these different neighborhoods and areas and try to build other types of hotels that are different. It might appeal to a different customer, whether it’s a different price point or a different style or a different neighborhood. Those are all ways that we throw in diverse inventory into markets where we already exist. In Washington, D.C., we have 10 hotels. In LA, we are about to open our fourth hotel. In Chicago, we have four hotels. That’s very common for us and we’d love to do that in Charlotte.

At one point, Kimpton was looking at opening a hotel in Dilworth. Is that neighborhood somewhere you might look at again in the future?

Yeah, we really liked Dilworth. The timing wasn’t right with the developer. We were brought in as a manager and we were helping to inspire what the property would be. But we became really bullish on that submarket, and we still think there’s room for growth in hospitality in that neighborhood and others in and around Charlotte — and in Charlotte downtown, too.

What we’re seeing in a lot of different cities is neighborhoods and areas where you wouldn’t normally have thought you would have stayed 10 years ago are now becoming places that are super cool and fun to be and where the next wave of traveler — whether it’s a mindset or an age group — is heading to those areas, and we love to be first in in those evolving areas. A little bit of grit is good for us.

What are some of the key things you look at in the site selection process?

We develop our hotels to target a certain level, a certain niche — whether it’s upper upscale or what we like to call lean luxury or luxury lite. In order to perform in that segment, you have to have a market that will support it. You’ll need the corporate demand and you’ll need high occupancy and you’ll need weekend business and demand drivers; you’ll need to be in an area or neighborhood that has that. Those are all things we look at in terms of the market dynamic. And then when we look at what product we want to bring to the market, we say, “OK, who’s going to want to stay here? How much are they going to be willing to pay based on what the guy up the street is paying?” I’m looking at a Residence Inn and the Ritz — what are they paying there? And then we target where we want to be. The product has to correspond with that positioning. There’s many elements and those puzzle pieces work together — sometimes it works and sometimes it doesn’t. This, we think, really works well.

The hospitality industry is changing so fast, with new technology and platforms like Airbnb — even within the hotel industry, there’s a lot of change and disruption. How does Kimpton stay competitive?

We think that regardless of the different niches in the market, whether it’s staying in somebody’s house or staying in a fancy hotel or staying in a hostel, people are looking for unique experiences, people are looking for something that is decidedly not home away from home — they’re looking for something different. Kimpton competes very well in there because we never do the same hotel twice, we never do the same restaurant twice. We provide really warm, welcoming service.

But we don’t rest on our laurels and we will tear up the blueprints from this building. The design in the next property that we’re opening (this) week in Palm Springs is completely different and completely Palm Springs, and that’s what I love about our approach — there’s no Kimpton in a box.

Ashley Fahey
Charlotte Business Journal

View the full article here