Two years ago, the Hotel Seagate on Summit Street had a date with a wrecking ball.
The 19-story eyesore, which Lucas County bought in 2014, was in the process of being torn down when one night at a dinner meeting, statistical trends intervened and granted it a pardon.
The numbers show that demand for hotel room space in the Toledo area is growing, and in the downtown area the need for new rooms is particularly dire.
The opportunities to add more hotel space downtown is so rare even a 48-year-old skeleton of a building like the Hotel Seagate, which is being redeveloped by First Hospitality Group Inc., of Chicago, remains a valuable property.
Statistically, hotel room demand — that is, the number of rooms sold in a day, month or a year — has been increasing an average of 3.6 percent annually the past five years in metro Toledo, according to STR, a data and analytics specialist.
Through October, the latest data available, there were 1,518,002 rooms sold in 2018. That’s an almost 13 percent increase compared to 2014 when there were 1,343,836 rooms in the first 10 months of the year.
Supply — defined as the number of rooms in hotels multiplied by the number of days in a specified time period — has been lagging demand, but this year it began to catch up by growing at 5 percent through the first 10 months while demand was at 5.4 percent.
But that is for the entire Toledo metro area. STR did not look at just the downtown.
However, a 2016 study of the SeaGate Convention Centre conducted for the Lucas County Commissioners found a significant need for more hotel rooms.
“The greater Toledo region has more than 5,000 hotel rooms, but only six percent of the total supply is located downtown,” the study shows.
“The lack of quality hotel rooms downtown is a major deterrent to attracting larger out-of-town conventions,” it added.
To some, it may seem that the downtown isn’t in need of any new hotel space. The Park Inn on Summit Street can offer up to 250 rooms while the newly redeveloped Renaissance Hotel on Summit has 241 rooms.
But the reason redevelopment of the Hotel Seagate is so vital is because it is attached to the convention center, said Carla Nowak, executive director of Destination: Toledo, the area’s tourism and convention bureau,
“When we get a request for a proposal for an event that we want to come downtown, they always want to be connected to the convention center,” Ms. Nowak said. “Having the Renaissance is great for downtown and it is a great property. But a lot of time, convention planners ask for rooms to be connected to the convention center.”
The Park Inn can provide its 250 rooms, but convention planners want more. Way more.
“The number we’re asked for is usually 400 or 500 rooms,” Ms. Nowak said.
“The beautiful thing about this region is you can have the same experience here that you can have in a very large city. But the room price point is below that of a bigger city,” she said. But, “Our No.1 hurdle is not having enough connected hotel rooms.”
Jan Freitag, a senior vice president at STR, said metro Toledo’s recent spate of new hotel construction — which includes two new hotels, a Courtyard by Marriott and a Residence Inn under construction on Secor Road — is putting demand and supply into balance.
“That’s not a given. That could have easily gone the the other way,” he said.
The national average for supply growth is 2.1 percent. Metro Toledo’s growth is more than twice that.
“So the question now is: ‘Should there be more rooms in Toledo?’ The answer is: it depends on who you ask,” Mr. Frietag said.
“Developers will say, ‘One project is needed, and that’s ours. We have the feasibility study and banks that say so,’” he said.
That is how the Hotel Seagate was saved from the wrecking ball.
Pete Gerken, president of the county commissioners, said he dined with First Hospitality Chairman and CEO Stephen Schwartz in 2016, and the developer made the case the old hotel needed saving.
“He was actually the one who told us, ‘Don’t demolish that structure,’” Mr. Gerken said.
Steve Roumaya and his son, Jon, whose Key Hotel & Property Management Co. originally was set to redevelop the hotel but later decided to pull out of the project, said the same thing — don’t demolish the hotel, Mr. Gerken added.
First Hospitality, which recently signed a memorandum of understanding and should have a formal redevelopment contract for the hotel early next year, recognized that Toledo is becoming a destination for conventioneers and that if restored, the Hotel Seagate could be a valuable property, Mr. Gerken said.
“With development, sometimes things happen when they happen,” the commissioner said.
“This is a look-forward investment for them. And this will put us back on par with the convention trade. We haven’t had the right pieces around the convention center,” he said.
“But timing is everything. I think this coincided with the rebirth in downtown revitalization,” Mr. Gerken said. “Five years ago, you had just the Huntington Center and the ballpark. People would hit those destinations and go home to the suburbs. But now with Hensville, the North End, and all the other new development, people’s view of the region changed.”
First Published December 15, 2018, 11:01 p.m.
