Convention center hotel approved, again

by Cole Dittmer
Wednesday, February 5, 2014

Ending a 14-year course of discussions, planning and re-planning, Wilmington City Council unanimously approved the purchase and development agreement with Harmony Hospitality for the construction of an Embassy Suites adjoining the Wilmington Convention Center. 

During its Tuesday, Feb. 4 meeting, city council approved the land sale for $578,820, which city manager Sterling Cheatham said was the fair market price of the land based on a 2007 appraisal and a request for proposals in 2011 for the hotel development.  

Ernie Olds, Becker Morgan Group, Inc. vice president and chief architect on the hotel project, said the 161,719 square-foot, eight-story hotel would include 186 suites. In addition to the space occupied by the suites, a 5,891 square-foot restaurant is included as well as 6,609 square feet of meeting spaces, an indoor pool and fitness center. 

The Embassy Suites will occupy an undeveloped riverfront site between the Wilmington Convention Center and the Wilmington Chamber of Commerce offices on Estelle Lee Place. 

Harmony Hospitality vice president Bruce Johnson said there have been three potential contractors identified for the estimated $33.8 million project and two of those have offices in Wilmington. Project funding will come from a $21.25 million loan from Wells Fargo, $9 million from Birch Capital and $3.5 million of developer equity. 

Johnson said a June 2014 groundbreaking is anticipated with an August 2015 hotel opening. 

In his presentation on the economic benefits of the hotel, Cheatham said the city should expect to see $6.4 million in revenues over the next 10 years from the development. Cheatham said his projections were based on a starting room rate of around $120 in 2016 and an occupancy rate of 69.89 percent. 

University of North Carolina Wilmington Swain Center for Business and Economic Services Senior Economist Dr. Woody Hall was one of the 15 city residents who spoke in favor of the hotel and supported Cheatham’s economic projections. 

One person who spoke against the hotel development was Matthew Davis, an attorney representing Sotherly Hotels, the owner of the Hilton Wilmington Riverside. Davis argued the city’s agreement to allow Harmony Hospitality to use 250 parking spaces in the Wilmington Convention Center’s parking deck was against 2006 consent decree guidelines to which the convention center hotel must be developed. That decree states that the parking deck’s spaces must be available to all users.  

Davis also argued that the North Carolina General Statute by which the city appraised the land value deals with subsidies that the consent decree bars the city from considering.  

“I think these agreements are leading the city into trouble and I would suggest that you table the decision to ask staff to look at it,” Davis said. 

Davis did not comment on any future legal action Sotherly Hotels is considering, and city council did not address Davis’ allegations.


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