ASHLAND, Ky. — Developers plan to buy the Ashland Plaza Hotel and transform it into a Marriott Delta, a four-star brand hotel, in a move that will revamp a struggling downtown and create about 85 to 100 jobs, Ashland Community and Economic Development Director Chris Pullem said.
The developers, Jim Nizzo and Andy Spiros, of New York, will likely invest about $16 million in the renovation project, said Pullem, who led the city’s efforts to land the project in Ashland. He said the announcement is “a long time coming." The city had approached the developers about buying the property two years ago after another investor had backed out.
“Luckily for us and the entire county, and region, they were still interested,” Pullem said.The developers, who also own the nearby Bellefonte Center, plan to renovate the hotel “from top to bottom,” by turning it into a full-service hotel that will offer a restaurant and 152 rooms.
“They have a very contemporary, elegant design,” Pullem said, adding that the investors don’t plan on “pricing themselves out of the market.”
Marriott’s Delta brand hotels are found mostly in Canada and rare in the U.S. Ashland will join Chicago, Baltimore, Seattle, Orlando, Richmond, Va. and Fargo, N.D. as the only cities where Delta Hotels are found once the deal is finalized.
The Ashland Plaza Hotel is currently owned by an oncologist from Ohio. The developers are set to close on the buy on June 30, and will then prepare for the “shut and gut” stage, wherein it will shut down the hotel and renovate it completely. It will take 10 months to a year before the Ashland Delta can open, Pullem said. The project will likely require 60 to 75 construction workers, he added.
But the whole deal hinges on the city creating a Tax Increment Financing, or TIF, district, which is a tool government bodies use to help a business with vertical construction or spruce up blighted areas. The TIF program works by capturing future, anticipated tax revenue increases within the TIF district and turning them into bonds.
The TIF district would exist for up to 20 years, and would not result in any tax rate increases, Pullem said. The TIF district will encompass parts of the downtown area from 13th Street to 18th Street.
Before the TIF district is created, the city needs the approval of the Boyd County Fiscal Court, because it is the tax-levying body of the county. The city commission and fiscal court plan to meet next Tuesday for a required public hearing at 9 a.m. at the old courthouse, prior to the fiscal court’s regular meeting at 10 a.m.
Pullem said the city is also looking to develop a state TIF to allocate future generated revenue toward knocking down the old Ashland Oil headquarters at 1401 Winchester Avenue, and replacing it with a new public parking garage and convention center. The city had taken ownership of the old building in February as part of the major downtown redevelopment project. A local TIF must be established before the city can gain state TIF approval.
Boyd County Economic Development Director Nickie Smith, who helped Pullem and the city close the deal, said the hotel project will help small businesses throughout downtown, and even the rest of the county. She said the hotel will attract more visitors to the area, especially if the convention center project comes to fruition.
“This is a win-win for the City of Ashland and Boyd County,” she said.
Pullem said the investors understand what a project of this scope means for the city.
“They (the investors) have development projects sprinkled all over the country ... they don’t lose very often. They know what this means for the City of Ashland," he said. "A newly-renovated hotel with a national brand tag to it doesn’t just mean success for their business. It means success for all the businesses surrounding that hotel, and for the whole community.”
The announcement comes on the heels of last Wednesday’s news of a $1.3-billion aluminum mill and 550 jobs coming to East Park, and after the announcement of 200 jobs coming to Ironton in the form of a carbon finishing plant.