Boutique hotel may inhabit East Hall

By Ted Yoakum
Staff Reporter

Plans to convert Western Michigan University’s iconic East, North and West Halls into private businesses have hit a snag, as the recent repeal of two vital state tax credits have forced redevelopers back to the drawing board in order to cover the estimated $60 million price tag needed to renovate the buildings, officials said during a meeting Wednesday.

KDC Real Estate Development and Investments, the company charged with the project, were counting on taking advantage of Michigan’s Historic Preservation and Brownfield tax credits to help reduce the cost of converting the unused East Campus structures into businesses, said Bob Miller, Western Michigan University associate vice president for community outreach.

“In essence, what [Governor Rick Snyder] has done is pull all of those incentives off the table,” Miller said. “It is still unknown what the level of state support might be and that has, if not slowed the project, certainly inserted some uncertain questions.”

In response, both KDC and WMU have turned to other resources for support, such as the Michigan Economic Development Corp. and the city of Kalamazoo. However, without further assistance, the project stands a chance of falling through, said Randy Doran, a KDC senior vice president in charge of the project.
“At the $60 million we have targeted this at, this becomes a very difficult project to make financial sense out of,” he said.

Doran estimates that, if the company is able to secure necessary tax credits and other incentives to proceed, construction could begin in less than four months.
The developer’s current design concepts will convert East Hall into a 50 to 100 room boutique hotel, which are typically smaller offshoots of larger chains hotel. In addition to lodging, the hotel would provide conference rooms, a fitness center and hosting for weddings and parties.

“What we decided to focus in on is a new market that is starting to open up across the U.S., and that is boutique hotels,” Doran said. “It’s a smaller operation with more personalized service.”

In order to accommodate for the increased traffic, KDC plans to construct a 450 stall parking structure, built right into the side of Prospect Hill, the top of which could be utilized by the hotel, Doran said.

“There weren’t cars when this place was built, so that’s why there is no parking,” Doran said. “A lot of people don’t realize that until you sit down and give it some thought.”

In addition, there are plans to convert North and West Hall into residential or student apartments and the Speech and Hearing building into an office complex.

“The developer’s funding challenges are the first major setbacks in the university’s initiative to allow private developers to restore the century-old buildings on East Campus since it began in fall of 2010. The initial request for proposal drew the attention of around 80 vendors nationwide, who, despite strict redevelopment guidelines from the university, were attracted to both the historic nature of the campus and the potential tax breaks such projects would provide,” Miller said.

By August, the field of potential bidders had been narrowed down to two, with KDC coming out on top. For Doran, a 1983 WMU alumnus, the project was one rooted in both personal and professional interest.

“I have been very interested in the status of the East Campus buildings,” Doran said. “It has always been in my radar screen for the last 10 to 12 years on what [the university] is going to do with these buildings.”

One of the reasons why WMU chose KDC over its competition was due to the development team it pulled together for this project, Miller said

Among these ranks are firms such as Granger Construction out of Lansing, Urban Campus Communities out of Detroit and Tower-Pinkster out of Kalamazoo.
“One of things we were really encouraged by was not just KDC but a very strong development team that represented a significant amount of breadth and depth and expertise,” Miller said.

Besides the typical costs associated with renovation over the construction of entirely new structures, KDC and its developers are also bound to the strict criteria laid forth by WMU administration, requiring vendors to both set up businesses that would reflect the principles of the school, as well maintain the structural integrity of the historic structures.

“Coming through with a wrecking ball was not an option,” Miller said. “Both the university and public will be pleased by the final product.”
Among the requirements administrators presented was for the preservation of East Hall’s southern atrium, basketball courts, and exterior pillars, all of which would be maintained under KDC’s current plans, Doran said.

Although the property will be given free of charge to KDC, Miller said the school will eventually regain control of all structures used for redevelopment within 20 to 30 years.

“The university does not plan to deed the property without having an input on what happens to it,” Miller said.

Administrators aren’t the only ones who had a say in the matter. Among those contributing to the drafting of the original request for proposal has been Students for East Campus, an RSO dedicated to the restoration of the WMU’s birthplace. The group has remained active participants, monitoring the progress made by both sides of the project.

“Our main concern is that students will not be able to make very much use of these new businesses,” said group president Tara Bell. “How many students are going to need a boutique hotel?”

While Bell said that this route was likely the best option for East Campus advocates, she remains mixed about seeing many of the buildings turned over to the private sector.

“It’s a bittersweet feeling,” she said. “I’ve always dreamed of taking classes here on East Campus, and now it doesn’t look like that’s ever going to happen.”

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Posted by thehair on Feb 5 2012. Filed under Breaking, Campus. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry