Dec. 27–New ownership of the Mayfair, Renaissance Grand and former Lennox hotels will shake up the downtown St. Louis market in 2014.
Adding the scheduled closure in January of the Millennium Hotel will produce an even more eventful year for the downtown lodging market.
The epicenter of change will be on Washington Avenue, where the nearly 1,100-room Renaissance Grand hotel complex — the region’s largest — is situated. Two established hotel firms will take over the financially troubled complex and put it on a more sound footing.
Bigger change is coming to the venerable Mayfair, located a block south of Washington. The hotel changed hands last week and was immediately closed by the new owner to start a $15 million renovation. It will reopen next summer as a Magnolia, part of a small, Denver-based chain of boutique luxury hotels.
At the Renaissance Grand complex, the lights will start coming back on next year at the one-time Lennox hotel, later the suites portion of the complex.
Hotel investment firm Maritz, Wolff & Co. said on Dec. 20 it is buying the closed Renaissance Suites for $3.2 million and will reopen it in 2015 as a Courtyard by Marriott after a $15 million renovation.
Patrick Lowery, principal of Maritz, Wolff, which has offices in Clayton and Los Angeles, said the suites’ location on the west side of the America’s Center convention complex and the property’s large guest rooms make it an attractive acquisition. The sale is expected to close Feb. 14.
“We think it’s a great historic building, and it’s well located adjacent to the convention center,” said Lowery, adding the hotel will seek to attract conventioneers plus business and leisure travelers.
The 24-story Renaissance Suites hotel at 827 Washington opened as the Lennox in 1929. It is on the National Register of Historic Places.
Conversion as a Courtyard by Marriott makes sense, said Gary Andreas, a hotel consultant based in Chesterfield.
“It’s probably very much a step in the right direction in terms of quality and price point in a hotel that’s needed downtown,” he said.
Across the street from the 165-room suites hotel is the 917-room Renaissance Grand. It is getting sold to a different owner, 800 Washington LLC, in which Haberhill LLC, of Potomac, Md., will serve as the hotel’s operating partner.
Both Renaissance hotels, opened in 2002, were foreclosed on by bondholders in 2009 after the properties failed to generate enough revenue to cover interest payments.
Lowery said that as a Courtyard, the downtown suites hotel will have a “bistro” in the lobby but that plans had yet to be made to reopen the “rathskeller” bar in the hotel’s basement.
As a Courtyard, the hotel will bookend the convention center with all-suites options. The competing Embassy Suites opened two years ago in the former Dillard’s building, just east of the convention center.
A NEW RENAISSANCE
Debt relief is a major factor in the $26 million deal for the Renaissance Grand hotel, Andreas said. With bondholders paid off, the new operator will be freed of debt, allowing it to spend more on needed improvements and to better absorb the discounts large conventions demand in booking blocks of rooms, he said.
Haberhill has hotels in Hawaii, Minneapolis, New York and Washington, D.C. Its managing director, Douglas Greene, is a former executive with Marriott Corp. and Host Hotels and Resorts, formerly Host Marriott Corp. Maritz, Wolff sold the Ritz-Carlton Hotel in Clayton a year ago but remains an asset manager at the property. Company officials have said the firm is looking for more hotels to buy.
A remaining challenge for the main Renaissance Grand hotel, expected to remain a Marriott, will be to increase its non-convention business. Andreas said the hotel’s business in that category is lower than at convention hotels in other cities.
“They need to do something to get that hotel on the radar screen during the non-convention season,” he said.
The biggest upgrade next year among downtown hotels will be the Mayfair-to-Magnolia conversion.
Denver-based Stout Street Hospitality completed its purchase of the Mayfair last week, then closed the hotel for renovation. Stout Street bought the hotel for about $4 million from UrbanStreet Group, of Chicago. The hotel is among several downtown St. Louis properties UrbanStreet bought from businessmen brothers Michael and Steven Roberts.
Leigh Hitz, president of Stout Street, has said the St. Louis Magnolia will be “a four-star hotel.” The Mayfair had struggled for years with low occupancy.
UrbanStreet became a big player in downtown St. Louis in late 2012 when it bought the Mayfair and several other buildings from the Roberts brothers for $16.5 million.
RENEWED GROWTH
Changes in the downtown market come amid growth in many hotel markets nationwide.
Atlanta-based PKF Hospitality Research predicted in a recent study that hotel revenue per available room, or RevPAR, will grow next year by a national average of 7.7 percent. Denver, Chicago and Houston will be among cities with higher-than-average growth, the report said.
PKF said the St. Louis hotel market will be among those with positive, yet lower-than-average RevPAR growth in 2014. St. Louis RevPAR will rise 3.2 percent, the study said.
Away from the St. Louis convention hotel cluster, the downtown market also will undergo some changes next year.
The Four Seasons Hotel, part of the Lumiere Place complex, is expected to be sold next spring to Tropicana Entertainment. It is paying Pinnacle Entertainment $260 million for the luxury hotel and casino complex, which includes the suites style HoteLumiere.
Andreas said the complex’s luxury hotel will remain a Four Seasons.
At the other end of the spectrum, the Millennium Hotel is scheduled to shut down Jan. 22, costing nearly 150 employees their jobs.
The Millennium, the cylindrical hotel with the restaurant that spins, closed most of its 780 rooms this spring. In announcing the closure, owner Millennium Hotels and Resorts said in November the hotel no longer met guests’ needs.
No redevelopment plan has emerged but city officials said they remain in talks with the owner about what might be done with the 28-story building, completed in 1969 at 200 South Fourth Street.
