Hotel Developers to Close on Sale of Former Covington City Hall
At a special meeting of the Covington City Commission called for Wednesday afternoon, the City will officially sell 638 Madison Avenue.
In its 105 years, the building at that address has been home to Coppins Department Store, the Covington Industrial Club, Covington City Hall, and next will be home to The Hotel Covington.
According to one item on the three-item agenda for Wednesday's special meeting, the City will sell the property for $1 million, subject to unnamed contingencies.
This is a dose of good news for the approximately $27 million project being developed by The Salyers Group in partnership with Chicago-based Aparium Hospitality. The project was the subject of disappointing headlines for the past several months. In January, the City had to renegotiate its agreement with the Salyers Group which originally called for a $3 million price tag on the building to be paid over twenty years. In January, the terms were changed to make the sale price $1 million, with $25,000 paid up front and the rest at closing. The terms also permitted the developers to walk away from the project if it became seemingly impossible to complete, a scenario that would have left the City in possession of a vacant, expensive-to-maintain building while renting a separate property from the Salyers Group on Pike Street where City Hall moved last autumn.
In April, Guy van Rooyen, CEO of the Salyers Group, returned to City Hall to inform the city that the project was stalled until federal New Market Tax Credits were to be announced. Van Rooyen seemed sure that the project would be slated for a portion of the awards and characterized the funding as critical to the project. The city commission voted to extend the so-called "due diligence" phase preceding the final sale for another sixty days.
Six weeks later, the New Market Tax Credits were announced and no project in the Cincinnati area received any, including The Hotel Covington. Van Rooyen remained optimistic, however. "Our project is going to be successful regardless of funding stack. It's not contingent that New Markets are the only way this can get done. We're very hopeful that we have New Market potential," he said at the time. "Our advisors are some of the best in the country with access to other firms nationwide, so we're still in the pipeline for others."
He said that his firm would continue to move forward on the closing of the property to show that they are committed to the project. "Nothing shows more resolve and certainty that we can get something done than to put hard money down, closing on the site. There's a lot of good people committed to seeing this work."
On Tuesday, van Rooyen said that the project continues to make progress and that he and his partners feel comfortable closing on the site. City Manager Larry Klein said that if all goes well, the closing will take place this week and called the deal more good news for Downtown Covington.
The hotel's design is expected to be a high-end homage to the Covington area's past and present with spacious, luxurious guest rooms, a new restaurant, a cocktail lounge, and a rooftop events area. Van Rooyen showed off the renderings and explained more of the concept in February.
The Salyers Group owns and operates the Madison Event Center across Seventh Street from the forthcoming hotel and expects to see much of its business coming from the many wedding parties that book their events there. The hotel's partnership with Aparium is promising as they maintain an 83% occupancy rate at a similar project in Milwaukee and just announced a new hotel project in an historic firehouse in Detroit.
The Salyers Group recently broke ground on another project, too: The Mutual Building across Madison Avenue from the hotel project where 12 luxury apartments and new commercial spaces will be placed in a 1921 building that has been mostly vacant for decades.
At Wednesday's special city commission meeting, called for 5 p.m. at City Hall, commissioners will also consider approval of $18.6 million in Kentucky general obligation bonds to finance infrastructure and economic development projects. More on the bonds will be published later at The River City News.
-Michael Monks, editor
Photo: Rendering of The Hotel Covington/RCN file