Historic Deal Calls for up to $50M in Private Investment, the Creation of Nearly 300 New Jobs and Over $500M in Economic Impact Over Ten Years, and Catalytic Improvements in Infrastructure, Representing the Second-Largest Single Private-Sector Investment Ever in Downtown Alexandria
Memorandum of Understanding Signed with Hospitality Initiatives Partnership
Last week in Phoenix, Arizona, Alexandria Mayor Jacques M. Roy, City Councilman Harry Silver, and GAEDA Director Clifford Moller signed a Memorandum of Understanding with Roland Fontaine, the CEO of Creative Analytical Solutions and a principal of Hospitality Initiatives Partnership (H.I.P.), a team of nationally-known and award-winning architects, hoteliers, and developers who joined together to propose a mega-million dollar deal in response to the City’s Downtown Hotels Initiative.
“During the last decade, the public spent millions and millions on a hotel and convention center, but we’ve never been able to completely capture the value of this investment,” said Mayor Jacques Roy. “Our aims were clear: First, we wanted a solution that minimized the public risk. We wanted to leverage the investment we have already made in order to attract private dollars and create a private deal, not a public hotel complex. Second, if the public needed to fill ‘a gap,’ then we wanted to make sure that any additional public investment would be infrastructure owned by the City—and supportive of the deal, not part of or tending to interpose the public in hotel operations. Third, we wanted to attract real private dollars, not just tax credit money. We never wanted to buy another hotel or get deeper into the hotel business. We want out of the business. To win this project, you had to put up real dollars and have an actionable plan driven by private dollars. This is a stark contrast to touted deals all around the nation, which rely heavily and in some cases exclusively on the public.”
H.I.P. is driven by David Rau of 3North Architects, Paul Cooper of Lifestyle Hospitality, and Roland Fontaine of Creative Analytical Solutions. H.I.P. has already, on this project, attracted equity, debt, and/or tax credit interest from 29 
different firms.
Two months ago, Mr. Rau, who crafted the master site plan, was honored at the annual conference of the National Trust for Historic Preservation for his work in the $120 million renovation and reopening of the Bedford Springs Resort, a sprawling and historic resort in South Central Pennsylvania. Mr. Rau and his colleagues have worked on major hotel projects throughout the nation, including Pinehurst in North Carolina and the Boorshead in Virginia.
Paul Cooper has over 18 years of experience in the hospitality industry and has managed nearly $500 million in hotel assets.
Roland Fontaine is the CEO of Creative Analytical Solutions and offers more than 40 years of experience in the hospitality industry. Prior to forming Creative Analytical Solutions, a company that has completed quality hotel projects in several states, Mr. Fontaine held executive-level positions at Ritz-Carlton, Sheraton, and Doubletree Hotels.
The Downtown Hotels Initiative, which was created by the Mayor and City staff, was launched in March 2009. It yielded proposals from firms across the nation at no cost to the taxpayer. Two months ago, these proposals were judged by a Selection Committee composed of members of the Alexandria/Pineville Convention and Visitors Bureau, GAEDA, the Hotel/Motel Association, the Alexandria City Council, and the Roy Administration. After extensive review, the Selection Committee decided to shortlist two firms.
“H.I.P. is proposing one of the largest private-sector investments in the history of Downtown Alexandria,” said Mayor Roy. “This isn’t just a short-term solution. This is thinking big about the future of Alexandria as the multi-parish, regional hub city it is. Consistent with my campaign promises, we needed to think about how to push Alexandria’s place in the state given the geography and resources we have.”
Council President Roosevelt Johnson echoed similar sentiments. “I have tried to move the City forward by pushing tourism and marketing our area,” said Johnson. “This is a big step, and with the marketing piece outlined in the MOU, we are on the right track.”
“Most importantly, H.I.P. isn’t asking the City to get deeper into the hotel business,” said Mayor Roy. “They’re asking us to get out of that business and to, instead, augment our investment in surrounding public infrastructure. We needed to do this anyway.”
H.I.P.’s proposal calls for approximately $40-$50 million in renovations to both the Hotel Bentley and the Alexander Fulton, including extensive new construction that will reorient the Bentley’s entrance onto Jackson Street and create a new pedestrian plaza between the Bentley, the Fulton, and the Riverfront Center.
H.I.P’s proposal does not require the City to purchase or lease any portion of the Bentley, though it does offer an opportunity for over 10,000 square feet of office space. The proposal does not require the City to relocate offices or demolish City Hall.
Sherri Smith of the APA-CVB is excited about these possibilities. Smith lauded the deal, offering a note of caution on ensuring the Alexandria Riverfront Center remains the preeminent concern. “I think that with both hotels in full operation, the CVB can do its job in a way I haven’t been able to do since we have been here. This initiative will help all hotel properties within the City, and hopefully region, attract better conventions and tourist business.”
Said Mayor Roy, “H.I.P. is also offering a long-term vision. From the beginning, we all agreed that we should be focused on locating a sustainable solution. Over a decade ago, when the City and the State built the Riverfront Center, they did so because they believed in the viability of the Hotel Bentley and the former Holiday Inn (today the Fulton). But we never had a master site plan or a cohesive plan for property management. Since the Riverfront Center opened, the Fulton has changed management three times, and the Bentley has changed ownership and management three times. We knew the only way these three assets, two of which are owned by the public, could succeed individually is if they also succeeded together.”
H.I.P. plans to invest approximately $40-$50 million purchasing and renovating both the Hotel Bentley and the Alexander Fulton, including the construction at the Bentley of a new 4,000 square foot restaurant, 3,500 square foot porte cochere, and a 2,000 square foot spa. They also plan to develop both retail and restaurant opportunities that would front a newly-created town plaza, located on the present-day parking lot of the Fulton and the present-day back entrance of the Hotel Bentley. The Bentley’s entrance is to be reoriented to face Jackson Street and the new town plaza. The City will invest in infrastructure improvements to the streets and offer the value of the Alexander Fulton in order to make way for private-sector investment. The City will also consider, if justified, construction of a parking garage, capital improvements to the City-owned portions of the Fulton, and other capped incentives. All of these represent the core components of the first phase of the plan.
As a supplementary component, in phase two, H.I.P.’s proposal calls for the private-sector development of a 32,000 square foot residential tower connected to the new parking garage. Phase two also calls for the creation of an additional 18,000 square foot green space, “Cathedral Park,” which would face the entrance of St. Francis Xavier Cathedral on Fourth Street and the side of Emmanuel Baptist Church on Jackson Street and would create the opportunity for the construction of ten townhouses.
H.I.P. estimates an overall economic impact of more than $500 million over the next ten years and anticipates the hiring of nearly new 300 employees, stabilized, after ten years.
Bob Dean, owner of the Hotel Bentley, said this week, “We are making real progress.”
Councilman Harry Silver said, “This is the real deal. It is a commitment to what we can be as a community—what we should be. It is thinking in phases down the road, not just tomorrow. I am so pleased with this process. If this doesn’t get it, nothing will.”
Councilman Silver cautioned there is work to be done, but the pieces are in place.
** Click on thumbnails for full-size renderings.
Filed under: CRA-1, Downtown Hotels Initiative, Infrastructure, SPARC, Smart Growth, Workforce
