Downtown Cincinnati's revitalization is getting at $17 million boost thanks to a deal the City of Cincinnati has struck with the owners of the Hyatt Hotel on 5th Street.
The City will leverage its ground lease on the prime downtown property to bring a top-to-bottom revitalization and renovation of the hotel. The City’s investment of $1.55 million will result in a private investment of at least $17 million. New York-based Lamco, LLC, a subsidiary of Lehman Brothers Holdings Inc., will buy the City's lease for $2.1 million, and the City will put in the remaining $1.55 million of the property value to the deal. In exchange, all 485 rooms, public spaces and hotel support areas will get nearly $17 million in upgrades and renovations.
The Hyatt improvements complement the other recent hotel projects downtown like the Residence Inn, the 21c Museum Hotel (opening in September 2012) and the Holiday Inn Hotel and Suites at 7th & Broadway. Developers for The Banks have also discussed a hotel on the riverfront.
"Cincinnati is becoming a more and more dynamic city because we have deliberately gone after economic drivers like conventions, as well as businesses and residents," said City Manager Milton Dohoney, Jr. "These are investments that help create ongoing revenue streams."
"The renovation of the Hyatt will make our city's hotel product much stronger, creating more opportunities to attract high-end convention business from across the country and the globe," said Dan Lincoln, president and CEO of the Cincinnati USA Convention & Visitors Bureau. "The promise of a high-end, contemporary Hyatt Hotel in the heart of downtown Cincinnati bodes well for continued growth in our region’s ability to attract and host the world's best meetings and conventions."
In 2011, the Cincinnati USA Convention & Visitors Bureau achieved its seventh consecutive year of growth in its two most important metrics: future hotel room bookings, which totaled 205,586, and the visitor spending conventions bring to the region, which reached a seven-year high of more than $61 million. Since 2004, that's a cumulative total of 1.28 million hotel room nights and visitor spending of almost $382 million, stellar results that reflect both the Bureau's and the region's collaborative approach to aggressive selling and positioning of Cincinnati USA as a top-tier destination.
"We believe that this investment makes sense for many reasons. The hotel will benefit significantly with the upgrades, it will contribute to the growing attractiveness of downtown Cincinnati to visitors from around the region and the world, and it will also improve value to the benefit of Lamco's constituents,” said Nan Molofsky of Lehman.
The City's Economic Development Director, Odis Jones, presented the plan to Cincinnati Council members today at the Strategic Growth Committee. It will be reviewed in the Budget & Finance Committee before going to Council for a full vote, expected before the end of June.
"It's a good deal because it takes a small investment, leverages it for top-tier hotel that will bring more business to our local economy," said Jones.
Renovations on the Hyatt are scheduled to begin later this year.