Hotels Feeling The Economic Heat
Sullivan recently teamed up with former state senator Glenn Steil to purchase the Ann Street Radisson Hotel. The partnership — Steil Sullivan Operations LLC — bought the property located at 270 Ann St. NW for an undisclosed amount of cash.
“There are a lot of hotels for sale at a great buy and we figured this was a great buy,” Sullivan said. “We bought it out of bankruptcy through a bank in Florida.
“Glenn and I have been lifelong friends, and he and his wife were interested in running it, so we made the bank an offer a year and a half ago. They finally came back to us with a counter offer if we closed before the end of (2003).”
Set on the west bank of the Grand River, the Radisson features 168 rooms, Pier 270 Lounge and the Landing Restaurant.
“Any venture is speculation,” said Steil, CEO of Compacito Inc. “Business is speculation.
“I’m not a hotel man like Sully is — and he’s the one who brought this to my attention — but we feel with the new convention center opening up and the economy hopefully coming back that it will be a good venture. They had already made a large investment and the price was right, so Sully and I felt it was a good move and good time to buy.”
The hotel had recently undergone $3.5 million in renovations prior to the purchase by Steil Sullivan Operations.
“It’s great facility,” Sullivan said. “It is a full-service hotel with a beautiful bar and restaurant and all-marble floors.
“The bank had just spent $3.5 million to convert it from a Holiday Inn to a Radisson.”
As for his assessment on the hotel industry in Grand Rapids, Sullivan offered somewhat less glowing reviews.
“Contrary to what people might think, the hotel business is bad in this area,” Sullivan said. “We have probably added 30 percent (more) new hotel rooms in the last three or four years and the volume is exactly the same as it was before they arrived. So, for the existing hotels, they are losing 30 percent of their business.
“All the hotel development was banking on the new convention center and it just isn’t going to happen,” Sullivan added. “Not for the next couple years anyhow.
“The (DeVos Place) facility is beautiful, but they’ve got to book it better. How many more rooms is it bringing up from last year? We’ll see.”
The new addition of the Radisson Hotel, now known as the Radisson Riverfront, increased Sullivan’s hotel holdings along U.S. 131 to 499 rooms. Sullivan also owns two other full-service hotels, including the 175-room Days Inn Downtown at Pearl Street and U.S. 131 and the 156-room Howard Johnson Plaza on 28th Street and U.S. 131.
“The bank made us an offer (on the Radisson), and we bought it because the price was so great,” Sullivan said. “For the next two years, it won’t make a lot of difference.
“But four or five years down the line, we hope it will get better if there are no more new rooms coming in.”
Sullivan also purchased the Howard Johnson property out of bankruptcy.
“The 28th Street property was awfully nice when I bought that also,” Sullivan said. “It’s just a matter of knowing some bankers and knowing the state of the industry.”
At the Radisson, Steil said he plans to establish a hotel shuttle service to and from events, and work in conjunction with the Grand Rapids business community to help jumpstart his newfound hotel venture.
“Grand Rapids is a community in Michigan that has a lot of appeal, and a lot of new conventions are coming here,” Steil said. “Sully sees it every day. Let’s face it; the hotel business has had a tough run for a while with low occupancy rates.
“But with the new arena, convention center and Delta Plex and everything going on, the hotel business should take a turn for the better.”
Sullivan, who built his local empire through real estate ventures and the carpet, tile and furniture store that bears his name, began his foray into the hotel business when he developed the Days Inn Downtown in the early 1990s.
“I don’t necessarily enjoy being in the hotel business, but I’m looking for the future,” Sullivan said. “The Days Inn hasn’t been making any money over the last couple of years. I’m happy that the hotel business is not my main means of making a living. But I think we can make it work. In the long run, we see a good future in that corridor.
“I was born and raised in this community and I want to see it prosper.”