by Toby Coleman (Smith Anderson)
Earlier this month, ULI Triangle organized a tour of The Durham Hotel where developer Brad Wiese of Maverick Partners talked about the redevelopment of the Home Savings Building, a downtown Durham historic landmark. At 53 rooms, the midcentury modern boutique hotel has worked to become more than just a place where out-of-town guests can find a nice place to sleep. To succeed, Wiese said, the three-year-old hotel has had to become a “community asset.” With a popular rooftop bar and a restaurant run by James Beard Award-winning chef Andrea Reusing, “The Durham” has experienced initial success in its goal to become a local hot spot. Wiese talked frankly about the process of converting an underutilized 1960s office building into a boutique hotel, discussed the financial side of the development (including the practical need for incentives from the City of Durham and Durham County through stabilization of the project), and the future for the development and the rest of downtown Durham.
- The development group that purchased the Home Savings Bank Building in 2008 spent a lot of time to figure out what they could do with the building before they decided to convert it into a boutique hotel, Wiese said. The decision to develop a hotel in the space was based in part on the group’s identification of a need in the Durham market for higher-end hotel rooms, Wiese said. (While demand for higher-end hotel rooms continues to grow, Wiese said, the shortage of hotel rooms in downtown Durham is gone. The Durham Hotel is one of a handful of hotels that has been built in and around downtown Durham over the last few years.)
- The project needed local incentives to get done. Wiese said that the development group was confident that the project would hit revenue targets once the asset (and the surrounding neighborhood) matured, but the development group’s numbers indicated that costs would outstrip revenues prior to stabilization. Incentive agreements negotiated with the City of Durham and Durham County have helped close that revenue “gap,” according to Wiese. Under the incentive package, the city and county provide the hotel ownership group an annual incentive payments over a seven-year period.
- The roof bar was actually the architect’s idea, Weise said. Listening to the architect’s suggestion to convert what Wiese calls the building’s “typical 1960s roof” and old utility room into a roof bar with panoramic views of downtown Durham has paid dividends. It’s now one of the hotel’s big draws, along with Reusing’s sought-after food, which is available in the restaurant in the hotel lobby. (Wiese said 50% of the hotel’s revenue is from food and beverage.)
- Project names are not often easy. Even the decision to call this project “The Durham Hotel” was fraught, Wiese said. “Our first thought was that it doesn’t make sense,” Wiese said. “Looking back now, it seems like such a no brainer. We sweated it quite a bit.”