Louisville group proposes $47.5 million redevelopment of historic Savoy Hotel and Grill
08/07/2013 11:29 AM
05/16/2014 3:39 PM
Its dark oak paneling, leather upholstered booths and heroic murals of settlers headed West have been soaking up Kansas City gossip and cigar smoke for 110 years.
Early guests signing the lobby register beneath the ornate Art Nouveau-style skylight included Teddy Roosevelt, W.C. Fields, Will Rogers, Sarah Bernhardt and John D. Rockefeller.
And now the clubby Savoy Grill and venerableSavoy Hotel
, a fixture at Ninth and Central streets since Kansas City was a rootin’-tootin’ cattle town in the 1880s, may be about to get a $47.5 million overhaul if the city approves tax incentives needed to help finance the project.
A Louisville, Ky., developer, 21c Museum Hotels, has an option to buy the red-brick hotel that opened in 1888 and the 1903 addition housing the restaurant. The company wants to restore the property as a luxury 120-room hotel and restaurant, retaining its period atmosphere and adding its own flourishes.
“I appreciate the history of the building and what it has meant to Kansas City,” said Craig Greenberg, president of the firm. “The opportunity to restore that building to its former glory and more is an exciting opportunity for us.”
But 21c, as in 21st century, doesn’t just want to look backward and simply clean up the paintings of the Old West artist Edward Holslag did for the Savoy Grill.
The firm wants to display plenty of contemporary art as well throughout the Savoy and give it a dual identity as a destination for the public as well as a historic hotel for guests.
“We try to be a true cultural center across the spectrum of the arts,” Greenberg said.
Laura Lee Brown and Steve Wilson, founders of21c Museum Hotels
, opened their first venture in downtown Louisville in 2006 based on their passion for urban revival and love of cutting-edge art.
That formula helped the 21c Louisville get the nod as the nation’s top hotel in 2009 and 2010 from the readers of Conde Nast.
The 90-room Louisville hotel, a historic rehab of five separate buildings, attracts 150,000 people annually, many to simply enjoy the works displayed in its 9,000 square feet of gallery space. The works are done by living local, national and international artists.
“All the public spaces are true, contemporary art spaces with curated, rotating shows,” Greenberg said. The art comes from Brown and Wilson’s private collection, along with works borrowed from other museums, collectors and galleries.
The company has opened two other hotels since, a 156-room historic property last year in Cincinnati, and earlier this year a 104-room new-construction hotel in Bentonville, Ark. Plans are in the works for 21c hotels in Durham, N.C., and Lexington, Ky.
Mayor Sly James said Greg Fischer, the mayor of Louisville, was singing that hotel’s praises at a recent meeting of the U.S. Conference of Mayors.
“He said it’s undoubtedly the best hotel he’s stayed in,” James said Tuesday.
The 21c proposal is seeking incentives from the city, a tax-increment financing request that would divert about $15 million in future tax revenues generated by the project to help reimburse development costs. The developer also is seeking $16 million in state and federal historic tax credits.
The incentives from the TIF and so-called Super TIF programs were approved in 1999 for a redevelopment plan proposed by the Savoy’s current owner, Don Lee. After Lee’s project failed to move forward, as well as a plan by another developer in 2009, the TIF Commission terminated that agreement in 2012.
James supports providing the new developer the same incentive package offered previously.
“The project is an opportunity to build some unique hotel stock we don’t have and revitalize the Savoy restaurant and bring vitality to an area of downtown where it’s needed,” he said.
“I think it’s an exciting project and we’ll look at the incentive package and be as judicious as we can. If we saw the need in 1999, it’s probably gotten worse. I don’t see a major problem, personally.”
Greenberg said the six-story buildings were in poor shape and would need significant reinvestment. The firm is prepared to invest $31 million up-front in equity and a construction loan.
“The Savoy is a wonderful building, but it’s seen better days and will require a significant rehab,” he said. “The other challenge is Kansas City does not have a strong hotel market; the average room rates are not as strong as other markets. This project requires a strong public-private partnership.”
Lee, the owner of the Savoy since 1960, said in recent years what was once a 200-room hotel had been remodeled into a 22-room bed and breakfast operation that also had about a dozen residents living in other rooms on a monthly basis.
Business at the history-rich restaurant, which can seat up to 600 people in its additional dining rooms, also has slowed down.
“It’s good, but not as good as it has been, maybe because there are so many more restaurants downtown than there were 10 years ago,” Lee said.
The owner supports the plan by 21c to redevelop the historic Savoy property.
“They are rated tops in the nation for management,” Lee said. “We think they’re quality people, and they have a background in operating historic properties.”
One organization that will need to be persuaded about the merits of providing incentives for the project is the Kansas City Visitors Convention Association. The organization has a standing policy that recommends the city use incentives to help build a major convention hotel rather than competing, smaller hotels.
“The association supports incentives for projects that will drive new hotel demand for Kansas City, like a large convention hotel, which provides the opportunity to attract and retain meetings that bring new dollars into our city,” said Jon Stephens, interim president and chief executive.
Specific plans for the Savoy have not been prepared, Greenberg said, because the firm wants to know whether the city will back the project first. The TIF Commission is expected to consider the request in September. If all goes well, construction would begin in late 2014. A completion date has not been determined.
The 21c Museum Hotel executive did say the Savoy Grill would be restored and run independently by its own chef, and the rooms and amenities in the hotel would be first class.