Allentown’s long-struggling Holiday Inn is slated for a $16.6 million makeover designed to give the 224-room hotel a new look, a new flag and a new place in the city’s blossoming downtown economy.
A consultant for the nine-story hotel at 902 W. Hamilton St. appeared Tuesday before the Allentown Neighborhood Improvement Zone Development Authority to lay out a year-long renovation plan that probably can’t happen unless the project can use generous downtown tax incentives.
About $14.2 million would be put into renovating the lobby, exterior and every room, and adding suites and a bistro. The outdoor canopy would be rebuilt and the brick exterior would undergo a facelift, while another $2.4 million would be spent buying new furniture and fixtures.
The hotel would become a Doubletree by Hilton, or comparable brand, said Michael Stoudt, a development consultant for hotel owners Vinay Barthwal and Ramesh Majethia.
The owners have been in talks with W2A Design Group architects, and construction managers Alvin H. Butz, both of Allentown, to handle the project, Stoudt said. The hotel would remain open during construction, he said.
“Virtually every space of the hotel will be redone,” Stoudt said. “It will basically be a new hotel, with a Doubletree or similar brand that is attractive to business travelers. Everything outdated is being replaced.”
ANIZDA won’t formally review the project until at least next month, but board members are open to the idea.
“If it’s a good project, of course we want to help,” said Sy Traub, ANIZDA chairman. “It will provide the downtown with another viable hotel to attract visitors and corporate meetings.”
The project would represent a reversal of fortunes for a hotel that has struggled since before it was purchased for $5.5 million in 2007. Built in 1982 under a Hilton Hotel flag, it was for nearly two decades the premier place to stay in downtown Allentown. But more recently, its outdated style, combined with a downtown that had been in decline for three decades, caused it to lose the Hilton name and occupancy dropped below 30 percent.
That rate has improved since the 170-room Renaissance Hotel opened at Seventh and Hamilton streets in 2014, bringing a new level of luxury with valet services, iPads in every room and nightly room rates of close to $200.
When the Renaissance is full on PPL Center event nights or during corporate conventions, the Holiday Inn often benefits from the overflow, Stoudt said. That growth is allowing owners to invest in the future, he said.
“Of course we’re all competing for the same travelers, but the people at the Renaissance have been very gracious,” Stoudt said. “They have literally walked visitors down the street to the Holiday Inn.”
Stoudt said that once renovated, the hotel won’t offer as many services as the Renaissance, but will have cheaper rates.
While everyone agrees a renovated hotel is important to the future of the downtown, there are some hurdles to clear before such an ambitious project can be funded.
In the NIZ, virtually all state taxes generated by new projects can be used by the developers to help pay off their construction loans. The Holiday Inn would likely qualify for that tax incentive if it gets bank financing. ANIZDA has the authority to approve the hotel project for NIZ incentives, or to reject it.
However, it’s less clear how much hotel tax money the hotel will qualify to use. As part of the clarification in the state budget last year, new hotel taxes generated in the NIZ are to be accumulated in a fund and distributed by ANIZDA to new hotel projects downtown. The law gives ANIZDA complete discretion on how to dole out the money. The problem is, Holiday Inn owners want to begin their project soon and ANIZDA has yet to craft a system for how to distribute what in 2015 was more than $300,000.
That will come soon, likely in a plan that would allocate some of the money annually to eligible hotel projects, while setting some aside for future projects. Among those likely to seek the money are Americus owner Albert Abdouche, who is renovating that long-closed 13-story hotel at Sixth and Hamilton streets, and Crocodile Rock owner Joe Clark, who has said he plans to build a low-cost hotel at 520 Hamilton St.
Traub said he expects ANIZDA to have a hotel tax formula ready for approval as early as April.
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SUMMARY
Background: The long-struggling Holiday Inn Allentown is slated to become a DoubleTree by Hilton or something comparable after a yearlong, $16.6 million makeover.
What’s changing: Every room, the lobby and the facade will be renovated, and luxury suites will be added to what will become a 208-room hotel with 32 suites.
What’s next: Hotel owners will seek approval in the next few months to access downtown tax incentives needed to fund the project.
Source: The Morning Call
National Industry & Labor Relations Services 