DeVos Place Has Dictated Hotel Size

March 28, 2003
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GRAND RAPIDS — A proposed hotel for Calder Plaza must have 400 rooms if the new DeVos Place is to maximize its potential to attract convention business here.

That declaration didn’t come from the proposed hotel’s developer, Gallium Group LLC.

No, Marriott International Inc. — a lodging chain with 2,600 properties in 64 locations around the world — delivered that succinct message because of DeVos Place.

“The size of the convention center is really what drove the size of the hotel — the 400 rooms.” said Jack Buchanan, CEO of Blue Bridge Ventures, a local commercial real estate brokerage and development firm.

The Gallium Group, made up of Blue Bridge and Hines Interests LP of Houston, has proposed a 24-story, 400-room hotel designed by noted architect Richard Keating for the plaza that is situated across Monroe Avenue from the new convention center.

The price tag for the venture is hefty, hovering around $95 million.

Developers feel that amount will build the hotel, a new City Hall and a new structure for Kent County. But both public entities have to agree to move from the plaza before the hotel can go up on it.

If that happens, 16 of the hotel’s 400 rooms will be suites that will overlook downtown from the building’s top floors. The hotel will have a restaurant and a bar, along with enough leaseable space for up to five more restaurants or retail shops.

The Gallium plan also has a health club with a spa and a swimming pool, a 12,000-square-foot grand ballroom, a 4,000-square-foot junior ballroom, 3,200 square feet of meeting space and an arcade that will allow the public to go from Monroe Avenue to Calder Plaza and back via an escalator.

“It’s a big, wide-open, high-ceiling, glass area that makes a visible connection, as well as a public connection, between the two,” said Buchanan of the arcade.

The hotel will be wired for Internet access and e-mail service. Room rates will average about $110 per night.

As for the plaza itself, Buchanan said it would stay open to the public. Its surface rights will remain with the city in the event Gallium successfully negotiates a deal for the plaza and its underground parking ramp.

The Gallium design offers more of a park-like atmosphere for the plaza, as the developer hopes to raise the level of daily activity there. Buchanan added that all the groups using the square for festivals would be welcome to continue to do that once the hotel opens.

“It’s uncomfortable to be there unless you’re a part of a major event,” said Buchanan.

“This is the focal point of the city and we want it to maintain that, so we want to make it more vibrant all the time.”

Gallium favors an alliance with Marriott, although the chain will not have an ownership interest in the hotel. Buchanan said they were interested in forging at least a franchise deal with Marriott, and possibly having the firm manage the hotel. But, he said, they were also looking at other operators.

“What none of them do these days is sign on with a project until they know it’s going to go. What is hindering our getting that done right now is trying to get the city and the county aspect done. Once we control that then we’re able to go back to the Marriotts, the Hiltons, and the Hyatts and say, ‘We’d like you to be our flag,’” said Buchanan.

Gallium has seven months left on its option to purchase the plaza and the parking ramp. The agreement the developers entered into with the city is good until October.

“Marriott wants to be here and they’ve done a lot of homework on the area. They were the ones who helped us with the original programming. Our plan has been tailored to trying to make it workable for Marriott. That is our preferred flag.”

Marriott officials suggested that Gallium raise the hotel’s number of rooms from 350, the quantity Gallium wanted, to 400. Marriott was familiar with the market because hotel officials had been in discussions with Amway when the local company was considering putting up another downtown hotel on property it owns at Fulton and Market.

After Amway passed on the hotel, Buchanan said Gallium started talking with Marriott. Based on the market information that Marriott already had, hotel officials told Gallium that a new downtown hotel would have to have 400 rooms in order for DeVos Place to be able to consistently compete for the larger conventions.

“They were really looking at the supply in the market already and saying that the extra 50 rooms was necessary, otherwise this convention center was not going to work. And if that doesn’t work, then you’re not going to work,” said Buchanan of Marriott’s message to him.

In its convention center forecast last October, Convene magazine called the relationship between a facility and its hotels a symbiotic one.

The gist of the report is that some larger cities that have built or expanded their centers are in trouble because not enough hotel rooms are within walking distance, meaning the lodging industry is key to gaining convention business.

“Right now, it’s the hotel package that is defining the successful destinations,” said Steve Moore, president and CEO of the Phoenix Convention and Visitors Bureau.

“If no headquarters hotel comes along to be located nearby, in most cases those centers will not be successful,” added Tom Muldoon, president and CEO of the Philadelphia CVB.

It’s true that Grand Rapids does not compete for the same conventions that Phoenix and Philadelphia do, but the tie between its building and hotels is just as important. That was made clear five years ago when the Grand Action Committee, which raised $33 million for DeVos Place, paid for a study that showed downtown needed another 1,000 hotel rooms to fully leverage the business potential of the center that costs nearly $212 million.

In addition to advising that the number of rooms be increased for the hotel, Marriott also suggested that Gallium contract with HVS International of Boulder, Colo., for its feasibility study, which it did.

Buchanan said Marriott accepts such reports from only two firms, and HVS is the larger of the two. The study found that a hotel on Calder Plaza would work.

“We wanted to boil all the gut opinion out of it that we could, and that was the purpose of doing the feasibility study,” said Buchanan. “ So everybody would know that we can support a 400-room hotel.”

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