By Seth Daniel
The owners of the Wyndham Hotel came back before the Council on Monday night to announce a more extensive renovation project and to re-pitch the Tax Incremental Finance (TIF) agreement that the Council had previously approved for an earlier failed venture.
Brian Stage, president of WEDGE Hotels, told the Council on Monday that his company planned to do a $9.8 million gut rehab of the hotel to make it more competitive with the newer hotels in Chelsea. The Wyndham was the first hotel to locate in Chelsea and opened its doors in the fall of 2000.
“This plan was conceived over a year ago with a business partner,” said Stage. “That didn’t end up coming to fruition, so we have decided to do it on our own. Back then, it was going to be a Holiday Inn. Now, we’ve upgraded it to be a Hilton…We decided to make a much greater investment that will produce incremental revenue that will produce incremental hotel taxes for the City. Our company was the first to develop a hotel in Chelsea and our neighborhood has grown up nicely around us and so it is time for us to step up and improve our building so we can compete more effectively.”
The renovations will include completely rehabilitating the first floor, with a new lobby, restaurant and lounge area. There will also be a gut rehabilitation of all the guest rooms, including all new bathrooms.
It will have a new fitness center and business center, flying under the DoubleTree by Hilton flag.
One year ago, WEDGE approached the Council with Colwen Hotels as a partnership to redevelop the hotel at a lower investment cost. The Council approved a TIF at that time in order to get the project moving and to prevent any lag time in business operations. However, major environmental issues were discovered that prevented the partnership from moving forward. That led to the TIF expiring.
Now, WEDGE has come before the Council seeking a five-year TIF for the new project. Over the five years, WEDGE would continue to pay the regular tax bill on the existing hotel, which this year was $390,586. However, if approved, the company would get 60 percent off the new value in the first year. That would equal out to a savings for property taxes and personal property taxes of $133,634.
The TIF would continue on at different percentages, with year two being 55 percent, year three being 50 percent, year four at 40 percent and year five at 30 percent.
Over the five years, the entire TIF would be worth $460,060 in savings.
“It’s a strategic redevelopment,” said Stage. “We could have just done some cosmetic changes and kept the hotel in business for a tenth of what we are spending, but we really think this is the right decision for the long-term health of the building and the community.”