Acquest says its hotel proposal for Ann Arbor's Library Lot makes sense
The latest conceptual plans for a hotel project as proposed by Acquest Realty Advisors.
While a hotel and conference center plan by Valiant Partners LLC has attracted much attention lately, another developer's proposal is still in the running.
David Ong, president of Acquest Realty Advisors, acknowledges his firm is just now pulling together the financial numbers Valiant has had the last two years to work on. But he said he doesn't feel at a disadvantage in the city's RFP process.
"One of our projects in New Jersey took several years to put together, so in the long shot, we do not feel disadvantaged that they got a head start," Ong said. "We feel confident there's enough information on the table to select either team and, if we win, the trip is just beginning."
Another look at the Acquest hotel drawings.
Ong spoke by phone with AnnArbor.com on Tuesday while attending a hotel investment conference in California. He said there was some optimism, but also a lot of "doom and gloom" about problems in the hotel industry as a result of a down economy.
Asked how that translates to developing a hotel on the Library Lot site in downtown Ann Arbor, Ong responded with optimism.
"When you look at time frames, there's so much work that would have to be done," he said. "We're talking many months before we'd actually be shopping in the capital markets, and the project is unique enough that we could be first in line when the dam breaks."
Acquest, of Bloomfield Hills, has laid out plans for a project called @ Hotel and Retail Center. It would include a 190-room hotel with meeting spaces, restaurants and retail shops. Acquest is asking the city to partner on the project by building a 40,000-square-foot conference center on the former YMCA site across the street.
That's different from Valiant's proposal, which asks the city to float bonds that the developer would use to build a $9 million conference center embedded with its hotel.
"Unlike the Valiant group, we're bifurcating the conference center from the hotel," Ong said. "Conference event centers don't generate the cash flow to pay for themselves, so in all instances that we're aware of, those are publicly owned."
One more view of the Acquest hotel proposal.
Ong said the conference center would be publicly owned - possibly by a city-county authority - and his firm has had positive talks with County Administrator Bob Guenzel about the concept. How much is spent on the conference center, Ong said, is up to the city and county.
"We're not suggesting that the city of Ann Arbor undertake that risk blindly or undertake by itself - it's going to take time," Ong added. "We've got a formidable team that's done this in many other locales and our thought is to master plan a kind of mini-area that would include the library, the hotel and the Y site, so that everybody is singing from the same hymnal plan-wise."
Ong said a feasibility study that looks at the financial impact to the community remains to be completed, but he's sure once it's done it will reaffirm what both developers are stating: That it can be done, that there is a market for a conference center in Ann Arbor.
Acquest is proposing that the debt on the conference center be paid, in part, by dedicating a slice of the local hotel tax, based on the theory that all hotels in the area would benefit from the conference center to some extent. Similar to Valiant's proposal, property taxes from the new hotel also would help pay off the project.
"A publicly owned facility ... is going to ultimately be paid for by public revenues," he acknowledged.
Ong said he believes the hotel can stand alone on its own merits on the Library Lot site, but the conference center makes it that much more economical. The developer is proposing that the value of the land or air rights be tied to whether or not the city builds a conference center across the street from the hotel.
Ong said the difference between the Acquest hotel proposal and Valiant's is "niche boutique" versus "luxury." Acquest's hotel would cost $25 million to $30 million.
"Our average daily rates are projected to be $120 to $125 - a whole lot less than Valiant," Ong said. "They're looking at more of a luxury product. We don't think it's a luxury market."
The faces behind Valiant and Acquest have some common ground. Bruce Elliott and Fritz Seyferth, who are representing Valiant Partners, both played football for the University of Michigan from 1969-1971. Ong played from 1960-62.
But now they're on different teams. And Ong says neither team is prepared to go to the next level without a whole lot more homework.
"There have been no market studies," Ong said. "All we can say is we've done this. This is our specialty, public-private partnerships. We've done this in five or six different markets, some of which are similar to Ann Arbor."
Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.
Comments
kaw-goosh-kaw-nick
Mon, Feb 8, 2010 : 7:11 a.m.
I believe they said the @ symbol was a placeholder for the logo of whatever hotel they include and not a real hotel brand. While I believe the fountain/sculpture needs work, I really like the idea that they want to theme this plaza to relate to the library. With so many voices in Ann Arbor, I'm not sure how they would edit the text that they would display on the sculpture. I have visited the Crown Fountain at Millennium Park in Chicago and believe that if Library Plaza turns our anything close, we would have a very memorable place. The Valiant proposal also suggested a central fountain that can be converted into a skating rink. I like the idea but I'm not sure they have enough area to pull this off. I would think they would need a Zamboni, hot chocolate cafe and a skate rental booth to make this work. The small size of the rink may limit the usefulness for anything more that a good game of crack-the-whip. If this moves forward, the buildings will be entitled though our city planning and city council process, but since this will become very public space, what ever happens in the plaza needs to be developed with the input of our residents and not simply a developers idea of what we need.
Aaron Wolf
Fri, Feb 5, 2010 : 2:19 p.m.
I just commented on the other article that the Acquest proposal was aesthetically reasonable. Well, I take that back. They have GOT to eliminate the stupid text and the @ symbols. That is moronic sophistry. Otherwise, it really is alright.
kaw-goosh-kaw-nick
Mon, Feb 1, 2010 : 3:46 p.m.
Anyone know what the next steps are going to be? Has the city hired a consultant to help select a team?
townie
Fri, Jan 29, 2010 : 11:08 a.m.
I'm dissappointed that annarbor.com would just let the comment about Bob Guenzel stand without asking Bob Guenzel. Luckily for us, Local in Ann Arbor got his side of the story: http://localannarbor.wordpress.com/ Developers like this simply don't understand that things in the real estate financing world are not going to go back to the way they were before. The financing "dam" is not going to burst. It might start dribbling from the toe drains at some point, but Michigan will be the last place to see any water.
MargaretS
Fri, Jan 29, 2010 : 7:46 a.m.
What makes no sense to me is the expectation that the market studies will be done AFTER a proposal is chosen. Huh? Why not do them before issuing the RFP? Wouldn't the $50k given to the consultants evaluating these odd proposals be better spent up front on a master plan for the area?
a2grateful
Thu, Jan 28, 2010 : 2:27 p.m.
I find amazing humor in all the plans that are now unfolding for the "Y" lot. Does anyone remember that AATA was going to buy the YMCA, demolish it, and joint venture commercial development, in conjunction with development of a new AATA station? Guess who exercised their option to purchase, ending AATA's plan? City of Ann Arbor, of course. Isn't it interesting that now the City is building the parking garage for "an unknown purpose and party." At the same time developers are also talking about building on the "Y" lot, at the City's expense, of course. It seems that great plans are in motion. Certain people have taken years to author this script, unbeknownst to the taxpayers. Of course, the City denies any of this as they continue to march ahead... in a new form of "March Madness?"
Lokalisierung
Thu, Jan 28, 2010 : 12:31 p.m.
"to draw people to the site like the Crown Fountain in Chicago's Millenium Park. Perhaps the city could hold an international design comeptetion to create such a center piece for the plaza." Sure...I know a German designer who is great at water featuers. This does look like a great idea. No sell the land to these peopel and let them do it on their own.
kaw-goosh-kaw-nick
Thu, Jan 28, 2010 : 10:29 a.m.
I also like how they propose to theme the plaza to relate to the library, but I am not sure about the fountain and sculpture idea. It would be cool if this became an iconic design feature in our city and become something to draw people to the site like the Crown Fountain in Chicago's Millenium Park. Perhaps the city could hold an international design comeptetion to create such a center piece for the plaza.
kaw-goosh-kaw-nick
Thu, Jan 28, 2010 : 10:16 a.m.
I think the folks from Acquest said they could build up to 15,000 SF of meeting space on the second floor, which seems like an appropriate amount for a small boutiue hotel. This is roughly half of the Valiant 32,000 SF Conference Center, with out the need for huge cantilevers over the plaza and Library Lane. When the time is right, the city and county, lead by a facilitator like Acquest could build a state-of-the-art events center on the YMCA site that could be combined with other mixed uses. The size of the facilty could be tuned to the market, and not jamed-in above our heads like the Valiant proposal. This new events center would be on a much larger lot than the Library Lot and could even include other benificial elements for the city like market rate or affordable housing, recreation space, even a much sought after outdoor ice rink and plaza. Perhaps the Blake AATA could be incorporated into the mix. This center could be connected directly to the new parking deck under Fifth to connect the libray, hotel and events center. This could create a new multi-modal transportation hub that could include a station for the proposed light rail or streetcar connector system to the Fuller Road Intermodal Station that is now being planned. Some day you could take the train from Chicago or the airport to the new Fuller Road Station, transfer to the downtown connector to wisk you to the Blake Center in the heart of Ann Arbor's new events district. Stay at the @Hotel, go to your conference, shop in downtown, eat at a local restaurant and relax in Library Plaza. I like that the Acquest proposal does not link the hotel and conference center into one big compicated and publicly funded project, but keeps them separate and scalable. In my humble opinion, these guys seem much more likely to work out a viable public-private partnership with the city.
B. Corman
Thu, Jan 28, 2010 : 9:27 a.m.
While I don't mind the look of the Valient proposal necessarily, I actually prefer the look of this proposal by Acquest (if judging simply on aesthetics). I just wish this proposal incorporated some meeting space area in to the design, possible using most of the first floor. The statement that Acquest made about them being "niche boutique vs. luxury" should be acknowledged and considered; it is a better way to go. "Niche boutique can incorporate some luxuries rooms where a luxury hotel may price many out of the market. Alternatively, restaurants and shops on the first floor would also be appreciated with an outdoor dining plaza. I look forward to all the creative efforts that will be applied to both of these projects.
a2grateful
Thu, Jan 28, 2010 : 9:26 a.m.
Of course it makes sense to Acquest... it makes dollars, too... from the taxpayers to their coffers... NO THANKS! Unless, they buy the land... building their own parking structure.. paying for it all, with zero municipal funding or tax abatements.