Hoteliers turn old into new with renovations - Development: historic rehabilitation

From San Francisco to Boston, more hoteliers are converting the nation's historic buildings into hotels that provide a point of distinction.

Renovating historic buildings is done through the U.S. Department of the Interior, and tax incentives are given to companies that do this type of renovation.

"It's 20 percent of the hard cost," said Tom LaTour, chairman and c.e.o. of San Francisco-based Kimpton Hotel & Restaurant Group, which has about 40 hotels in its portfolio.

Chip Conley, president of Joie de Vivre Hospitality, which is based in San Francisco, said at best the cost of renovating a historic building into a hotel is about as expensive as building a new one.

Rick Widman, president and owner of Charleston, S.C.-based Charming Inns, said rehabbing historic buildings into hotels is more difficult than building new hotels and it doesn't necessarily allow for a higher rate.

"You are unique and have to look at the market to determine your positioning," Widman said. "Supply and demand determine the rate. We're more of a point of difference."

Charming Inns has six properties in its portfolio, three of which are members of Historic Hotels of America: the Wentworth Mansion, the John Rutledge House Inn and the Kings Courtyard Inn, all in Charleston.

When determining whether a historic building can be converted into a hotel, the layout and determining the number of guestrooms and bathrooms to make the project financially viable are important, Widman said. He also said he looks for restaurants and retail outlets near the building as other factors to entice guests to stay at a location.

"We're a relatively young country, and a lot more people are paying attention to history before we lose some of it," he said. "Charleston has been a forerunner in a lot of that. As land is difficult to find and people are not wanting to tear down old bank buildings in places like New York and Philadelphia, we'll see more restorations. We're so cookie cutter in America. People are looking for a unique experience."

In San Antonio, Daryl Saldausky converted an old goods operations building that was built in 1896 to the 64-suite Best Western Sunset Suites.

"I'm not interested in any other type of hotel development," Saldausky said. "But it's not everybody's cup of tea."

LaTour said it's important to have a strong back-of-house operation to be successful with historic rehabs.

"If you do a one-off without a brand, it's difficult to fill a hotel, but if you have access to technology, marketing, customer-relationship-management software, you can do a historic renovation with an advantage," he said.

LaTour said the inventory of old buildings is plentiful throughout the country.

"There is sort of a herd mentality in hotel development," he said about the possibility of more historic redevelopment. "We're looking to acquire historic hotels in major cities."

Conley said what's appealing about historic buildings to Joie de Vivre is that one can't replicate a building like the one in San Jose, which is in the middle of Silicon Valley where everything is new and future oriented.

"Our specialty is boutique properties," he said. "It makes sense that we look more and more at this."

jwalsh@advanstar.com

m[C] Online Visit www.Hotel Motel.com, to read more about hotels with a historic background.

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