Thomas Breen photos
Site of $50M hotel. Below: Developers, bankers prepare to toss dirt.
Bruce Redman Becker broke ground Wednesday on a roughly $50 million bet: That a new 165-room hotel at the iconic and long-vacant Pirelli Building will be able to attract lodgers, restaurant goers, and business visitors — even as the Covid-19 pandemic continues to ravage the hospitality industry.
That ceremonial groundbreaking took place at 500 Sargent Dr.
It marked the latest stage in Becker’s planned transformation of the Marcel Breuer-designed Brutalist building, which was built in 1968, into a new boutique, Hilton Tapestry-brand accommodation dubbed the Hotel Marcel. The hotel is slated to open its doors in Fall 2021.
Becker, a Westport developer and architect who previously built the 360 State St. luxury apartments downtown, purchased the Pirelli Building from Ikea in January for $1.2 million.
Becker & Becker
Design renderings of the future Hotel Marcel.
The celebratory press conference took place Wednesday morning inside the architectural landmark’s hollowed-out ground floor. Becker joined a host of representatives from the hotel’s main funder, Liberty Bank, as well as from Hilton Tapestry and Chesapeake Hospitality to boost this planned venture in particular — and the future of the hotel industry in New Haven and Connecticut more broadly.
“Hospitality is at the tip of the spear in terms of the impact of the pandemic,” said Chesapeake Hospitality President and CEO Chris Green, the head of the company that will operate the Hotel Marcel. “Doing things like this matters to push this industry forward. Hospitality is here to stay. People love it. I love it. And making this kind of statement and this kind of commitment matters to the hospitality industry.”
Thomas Breen photo
Becker, posing for a photograph by the New Haven Register’s Peter Hvizdak.
Chris Arnold, Liberty Bank’s senior vice president and manager for commercial real estate, said that Liberty Bank will be providing a $25 million loan to help build out the Hotel Marcel, which he said should cost around $50 million in total to complete.
“We’re kind of redoubling our effort in Connecticut and in particular in New Haven because we think there’s a lot of opportunity here,” he said. “There’s been a lot of disruptions with banks [during the Covid-19 pandemic], and we’re looking to capitalize on it.”
And Liberty Bank President and CEO David Glidden used the word “bullish” four times in five minutes as he described the nearly 200-year-old regional bank’s approach to investing in New Haven and in Connecticut during the ongoing crisis.
The hotel industry has indeed been uniquely hard hit during the pandemic and associated economic downtown, as both business and leisure traveling have ground to a halt amidst social distancing requirements and travel restrictions designed to mitigate the spread of the novel coronavirus.
At Wednesday’s presser.
Connecticut’s lodging industry hemorhaged nearly 10,000 jobs in just the past six months, according to this article by Hearst newspapers’ Luther Turmelle. New Haven’s Omni has furloughed most of its 170 employees. Hilton recently permanently closed its 44-story Times Square hotel, while just 37 percent of New York City hotel rooms were occupied as of the second week of September, compared to 90 percent at this time last year, according to a hospitality analytics firm quoted in the New York Times. According to a late August report put out by the American Hotel and Lodging Association, those low occupancy levels track for urban hotels across the country. “Even as travel has ticked up slightly six months later” after the start of the pandemic this spring, the report reads, “the hotel industry remains on the brink of collapse.”
The Hotel Marcel’s backers promoted a different vision Wednesday as they touted the hotel’s location on the water, visibility from the highway, proximity to Yale University and Yale New Haven Hospital, environmental sustainability, historic preservation, and servicing of a uniquely “under-hoteled” city as all ingredients for this particular hotel’s success even during challenging times.
First “Net-Zero” Hotel
Becker describes sustainability plan for the Hotel Marcel.
Becker said that Hotel Marcel will be the first net-zero emissions hotel in the country upon completion, thanks to its planned use of high efficiency heat pumps, solar panels on the building’s roof, as well as three large solar canopies to be built on a grassy plot just north of the building. The hotel will be both passive-certified and LEED-certified, and will use only one-fifth of the amount of energy than an average Energy Star project of this scale would use, he said.
He said the ground floor of the building will have a roughly 60-seat restaurant and bar and two meeting rooms. The second floor will have guest rooms. The third and fourth floors — per the building’s cantilevered design — will remain open air. The next four floors will be all guest rooms. While the top floor will have a gallery space and more meeting spaces.
“We have a very conservative approach” to financing this project, Becker said. “We’re in this for the long term.” He said that, even if the hotel’s meeting rooms go unused and guest room occupancy is less than expected for the first year or two after the hotel opens, his company has enough of a financial cushion to keep the business in operation.
“We’re not expecting things to change overnight,” he said about the pandemic’s current hit on the hotel industry.
Future groundfloor restaurant space.
Nevertheless, he said, the Hotel Marcel is well-situated to attract business once the accommodations business picks up again. Well over 100,000 cars a day drive along that stretch of I‑91 and I‑95 that runs immediately adjacent to the building, he said. Yale University and Yale New Haven Hospital are not going anywhere and will likely provide a customer base for both lodging rooms and the meeting spaces. And “there’s about a third less hotels per capita” in New Haven than in Providence, he said, even as other hotels, like one on “Rt. 34 West,” continue to pop up in and around downtown. Still others, like a planned new Hilton at the corner of Elm Street and Orange Street, have ground to a halt.
Liberty Bank’s Arnold (pictured) cited similar reasons as he explained why the bank was confident about its $25 million investment in the planned new hotel.
“We look at location, which is phenomenal,” he said. “We look at drivers for occupancy. We’re going to get visibility from the highway … and I think you’re going to have some Yale-driven occupancy, from both the hospital and the university.”
And this is a Hilton-brand hotel, which should drive some traffic to the site thanks to Hilton’s rewards program for frequent customers.
“Projects like this represent an opportunity to be associated with something that’s very important to New Haven,” he said, ” in terms of the redevelopment of a historic landmark and connection to the community.”
Click on the Facebook Live video below to watch the full presser.
Lots of big numbers in this article. But the one number I care most about is missing - the impact on the Grand List. Development is good. But if it doesn't bring in tax revenue to the City then it doesn't help much.