Hotel economics

Even as financiers checked into San Diego last week to compare notes on opportunities for hotel investment, a drama playing out 3,000 miles away in Westport could provide a checklist for the economics of establishing boutique hotels in upscale town centers ”“ and for special districts in such towns to attract such establishments.

The owner of the tony antiques store L”™Antiquaire is suing the town of Westport, hoping to ward off a redistricting of the riverside pedestrian plaza where it is located to commercial office use, a change that would include the Inn at National Hall.

Greenfield Partners, a developer based in Norwalk, wants the conversion as part of its acquisition of the boutique hotel and several adjacent buildings from Stamford-based Antares Investment Partners, to which it had sold the building in 2007 for $20 million.

The district is currently zoned for retail and hospitality use, but Greenfield reportedly has stated in a legal filing that the Inn at National Hall is operating at a loss and is no longer viable.

The complex totals about 42,000 square feet of space, and for a period had a number of establishments, with the Inn at National Hall dominating the plaza on the Saugatuck River. The hotel has eight suites, several featuring loft bedrooms above living rooms, and eight smaller rooms.

The Inn at National Hall”™s original structure was built in 1873. In 1993, developer Arthur Tauck converted the building into a small hotel and retail property, at a reported cost of $2.5 million. The following year, the site won inclusion in the National Register of Historic Places.

 

The hotel”™s high point may have been in 1998, when President Bill Clinton visited the hotel”™s restaurant as part of a fundraiser dinner.

 

Among the survivors today of the riverside block is L”™Antiquaire, which sells high-end antique furniture and fixtures such as mirrors and chandeliers. The company also imports made-to-order tables fashioned from antique wood parquet flooring.

As such, the store”™s proximity to a busy, boutique hotel would allow it access to a steady stream of well-heeled buyers on which to make a first impression.

While Westport still has attractive lodgings, should the Inn at National Hall cease business the town would lose a major establishment steps from downtown and close to attractions such as the Westport Country Playhouse and the Levitt Pavilion for the Performing Arts.

Just a few boutique hotels in Fairfield County have the twin attributes of catering to a high-end clientele, and being centrally located in a town. In Westport, the Westport Inn and the Inn at Longshore are only a short drive from the action; in Greenwich, the Delamar Greenwich Harbor is situated waterside with the Bruce Museum and posh Greenwich Avenue just north.

Even as Westport weighs the future of the Inn at National Hall, industry members got an earful of the industry”™s perils and opportunities at the American Lodging Investment Summit last week in San Diego, with speakers including Matthew Avril, Neil Jacobs and Vasant Prabhu of Starwood Hotels & Resorts Worldwide Inc., which is planning to relocate its headquarters to Stamford; Edd Hendee of Greenwich-based Starwood Capital Group; Edward Khediguian of Norwalk-based GE Capital; and Gary Mendell and Clark Hanrattie of HEI Hotels & Resorts, a Norwalk-based real-estate investment trust focusing on the sector.

Starwood reiterated its plans to open between 80 and 100 hotels this year, one of which will be its 1,000tth; and in a poll of some 3,000 hotel industry financiers attending the summit, about three in four respondents said they expect an economic turnaround for the hotel industry this year. The conference was sponsored by the American Hotel & Lodging Association.