Asheville council votes down proposed 8-story hotel

ASHEVILLE - In the midst of rising criticism of downtown hotel construction, the City Council Tuesday voted down a proposal to build an eight-story $24 million Embassy Suites near the northwestern edge of the city center.

Council members held a three-hour quasi-judicial hearing on the hotel proposal at 192 Haywood St. then voted it down 7-0. They cited concerns about parking, traffic and a high concentration of hotels in that portion of downtown. The 185-room Embassy Suites would have been the third hotel within 500 feet and the second owned by the Raleigh-based Parks Hospitality Group.

"I’m looking at this corridor now and it’s not very diverse. It’s going to have three large hotels in a quarter of a mile," said Vice Mayor Gwen Wisler who made the motion against the hotel.

In voting down the lodging facility, the council went against the recommendations of the Asheville Area Chamber of Commerce, leadership of the Grove Arcade and two boards whose job it is to make recommendations on such projects. Also speaking for the hotel was former vice mayor Jan Davis, who opened a tire store on the west side of downtown 30 years ago.

Davis said when he opened his business that part of downtown was more viable than it is today.

"You’ve heard me say for a long time we’ve got to do something to develop our gateway to the city," he said. "As you come into the western corridor there is a lot of blight."

Another city board, the Downtown Commission, voted against the hotel based on a wall that was later taken out of the project. The commission liked other aspects of the project.

Downtown is in the middle of a decade-long hotel building boom that should exceed $163 million by 2018, according to a Citizen-Times examination. From 2009-18, a total of 11 downtown hotels have been built or will be completed, according to developers' plans. In the 40 years before 2009, only five hotels were built downtown.

The boom became a city elections campaign issue in 2015 and promises to play largely again in this year's elections. Hotels provide jobs, increase property values and boost other businesses. But critics who helped sweep in new council members last year say the hotels damage Asheville's character, offer relatively low pay and strain the infrastructure.

The hotel would have been built on the site of the former Buncombe County sheriff's office. It's in a section of downtown that has largely not shared in the city center's discovery as a tourist destination. The section includes several homeless services, including shelters.

But it also has the nearby the Hotel Indigo which was built in 2009 and is probably the top-performing hotel of its brand in the nation, said Charlotte commercial real estate appraiser Tommy Crozier, who served as a consultant for Parks Hospitality Group.

"It was pretty obvious that the northwest part of downtown is different than the rest of the downtown core," Crozier said, adding that market conditions in that part of the city center have improved, largely due to the Indigo at 151 Haywood.

In 2015 the Indigo sold for an average of $300,000 a room, the highest per-room price in the state's history, he said.

In March, Parks Hospitality opened the seven-story $14 million Hyatt Place at the corner of Montford Avenue and Haywood, the site of the former Three Brothers Restaurant.

The new Embassy Suites would have been across from that and could make about $8 million a year in sales, according to figures presented by Crozier. That would have added about $250,000 annually in property taxes and paid out approximately $500,000 in hotel occupancy taxes. The room taxes are controlled by the Buncombe County Tourism Development Authority and are used mostly to promote Asheville as a tourist destination.

Attorney Bob Oast, who was representing the developer, said the planned 5,000 square feet of conference space would help fill a niche only occupied by one other downtown hotel, the Renaissance, which has a bigger conference area.

"We think this project will contribute to the city in a number of ways while requiring very little from the city," said Oast, who is also the former city attorney.

Planner Blake Esselstyn responded to concerns about hotel density saying that was only a small part of the western part of downtown and that overall it was diverse with a church, apartments and businesses.

But council members were unconvinced. They also questioned the developer's traffic study that showed negligible increases in cars.

The greatest sticking point appeared to be parking. Council members said they wanted more than a 200-space garage so that hotel workers wouldn't have to look for spaces in an already crowded parking scene.

Council members, including Keith Young, emphasized that the situation would be compounded because some Hyatt employees were using the empty lot where the new hotel would go.

"People across the street will lose parking and have to park in adjacent areas," Young said.

Park Hospitality staff said that not all guests brought cars and that most workers' shifts didn't coincide with times when guests would need parking.

At one point it looked like council members might consider a deal to pay for additional parking spaces to be built in the deck for public use but decided a $17,000-per space cost was too high.