The XSS Hotel Group, which operates the Residence Inn and TownePlace Suites in Chelsea, has proposed to enter into the ownership of the Wyndham Hotel on Everett Avenue and completely renovate the 15-year-old facility – putting nearly $10 million into it for transformation into high-end accommodations.
“The principals of XSS are in the process of forming a joint venture with Texas-based WEDGE Group, owners of the Wyndham, in order to eliminate both an uncertain future and assure a positive trajectory for this pivotally located hotel,” wrote Christine Thomas of XSS. “This decision to join forces in this exciting opportunity makes sense to both parties…WEDGE Group also believes int eh future of the community and sees a partnership with XSS Hotels as good for both their real estate investment and their employees.”
Thomas unveiled the plan to the City last month in order to request a Tax Incremental Financing (TIF) plan. The plan would be for five years and would offer up to 60 percent relief in the first year from property taxes and personal property taxes. By the fifth year, it would trail down to 30 percent relief.
City Manager Tom Ambrosino said he was in favor of the modest tax reduction, saying it would still result in new tax dollars coming to the City even with the TIF in place.
“The new joint venture would continue to pay full real estate taxes on the existing base assessed value,” he said. “For this reason, notwithstanding the tax relief, this large investment by XSS will still result in new tax dollars to the City in every year of the TIF Agreement. The total new tax dollars to the City during the five-year TIF are estimated at $243,307…The proposed TIF terms are similar in many respects to other TIF Agreements approved by the City Council over the past decade.”
The TIF Agreement was presented to the City Council on Monday and will be discussed further at upcoming meetings.
If approved, Thomas said the company plans to invest $9.8 million into the hotel, beginning in November and concluding in March 2016.
“The appearance of the outside of the hotel will be modernized,” she wrote “The windows, mechanical systems, porte-cochere and bathrooms will be replaced as well as full interior upgrades to every area of the hotel. As part of the revitalization of the Wyndham, meeting space will be expanded and three separate dining options are planned with breakfast, lunch and dinner service available to guests and the public.”
The renovations would require a complete closure of the hotel between November and March.
In that time, Thomas wrote that current Wyndham employees would be offered employment at other area hotels in its network. Transportation would be provided to those employees if the new job is outside of Chelsea.
“We expect the proposed changes in hotel operation, which complement the physical improvements to the property, will cause no loss in the overall number of full-time or full-time equivalent jobs with an anticipated gradual increase in positions,” she wrote. “Our promoting-from-within philosophy combined with our strong regional growth will provide improved advancement potential to our Wyndham team members.”
Ambrosino said that without the partnership, upgrades and TIF, he worries that the property will sell to a less qualified hotel operator.
“I am concerned that if XSS does not obtain this tax benefit and is unable to proceed with this joint venture effort, the City might see a future decline in the Wyndham property or sale by WEDGE to another hotel developer of lesser quality,” he said.
The total contribution towards the property would be $7.4 million, with the remainder being attributed to the closure costs.