BALTIMORE, MD -- A Richmond-based developer has landed Sonesta Hotels as the brand-name operator for 301 N. Charles St., a hotel conversion project that has been stalled for more than a year while seeking financing.
Lifestyle Hospitality Group has been shopping for a hotel operator for the project since at least this summer, when it announced it put off the launch of its Lifestyle HG brand.
“Sonesta will be our partner in every sense of the word,” Lifestyle partner Paul Cooper wrote in an e-mail. “They will deliver a well-respected and internationally recognized brand that will compliment the upscale product we are developing at 301 N. Charles Street.”
Lifestyle’s plan is for a four-star, luxury boutique hotel and spa, with 97 rooms, 20 of which will be large suites. The developer also hopes to bring a restaurant or a bar to the first floor of the hotel, which faces a crowded retail strip just north of the city’s main central business district.
Boston-based Sonesta owns 34 hotels and resorts from Lima, Peru, to Cairo, and also has a business offering tours of the Nile River. Most of these properties are luxury hotels in pricey markets, such as Miami and the Middle Eastern resort town of Sharm al Sheikh.
But Mark Yates, a vice president with the company that owns the building, Virginia-based USP Development, said that Sonesta will not be an equity partner in the project, and confirmed that Lifestyle has brought on Redwood Capital Advisors LLC as a minority investor. The project is expected to cost about $31 million and construction is slated to begin this coming spring. No architect has yet been enlisted to design the redevelopment.
“It’s a great project. I think we’ve structured it financially very well. It’s a very unique, very nice building for this,” Yates said. “We prefer to do things in a first class, upscale position, rather than run of the mill properties. They are just an extremely capable group focused on first-class service.”
USP has minimal experience with hotel projects. The company, which holds about $400 million in real estate assets, owns a Sheraton hotel near the Pentagon in Arlington, Va., and has recently focused on Cielo Falls, a log-home retirement community in the Blue Ridge mountains of North Carolina, whose first homes went up in 2007.
Lifestyle announced more than a year ago that it would convert the historic, Beaux-Arts style office building at 301 N. Charles into a hotel operated under its own flag, complete with a spa and yoga classes for health-conscious travelers.
But poor market conditions have since forced Lifestyle to put off the launch of the Lifestyle brand and cancel projects in Tennessee and North Carolina.
“Lenders are not going to lend based on a new brand without an operating history,” Cooper told The Daily Record in August.
The developers of 301 N. Charles have also applied to the Baltimore Development Corp. for $18.3 million in federal bond funding under the American Recovery and Reinvestment Act of 2009.
Under the stimulus program’s Recovery Zone Facility Bonds program, the federal government has given the BDC the reins to decide among 19 city projects vying for $30.8 million in tax exempt bonds to finance construction and other costs for their planned efforts.
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