Saving Yorktowne: Unlikely story of how York landed Hilton and why that's such a big deal

Anthony J. Machcinski | York Daily Record

The future of one of the largest cities in Pennsylvania was on the line. A surge of efforts to revive the faded downtown was in jeopardy. And few people recognized that the demise of a century-old hotel might doom the fate of York, Pa.

Hundreds of apartments and dozens of restaurants and retail shops had opened in recent years, but the Yorktowne Hotel remained on the sidelines – especially in the 18 months it sat vacant and under renovations.

Little support could be found to restore the historic hotel, replete with multiple ballrooms, a members-only dining room and 121 guest rooms that still -- quaintly or archaically -- used metal keys.

One proposal called for turning the Yorktowne into a boarding house, a home for transients, people stuck at the bottom of that ladder or clawing their way up.

On May 15, however, city leaders proudly announced a deal with Hilton that would reshape the Yorktowne as a modern, boutique hotel.

“It’s a real coup,” Silas Chamberlin, CEO of Downtown Inc. said.

The deal wasn’t an open-and-shut case either. This was Hilton Hotels –- the hospitality titan with more than 5,000 properties across 100 countries. This was the city of York, where national brands are rare, and include only basic names such as McDonald's and Subway. Even those on the inside of the project weren’t completely confident until they neared the finish line.

So how did York, with its population of 43,000, woo Hilton? And how did this one project become so critical to the success of the city? This is a story of months of meetings, hundreds of documents and a lot of positive energy. And this is the story of the determination of a few people to make outside investors see the same potential in York that they did.

Laying the foundation

The Yorktowne Hotel opened in 1925 at South Duke and East Market streets.

In its heyday, it was the place to stay in York. If you were looking to hold a family reunion or a large dance, you did it at the Yorktowne. When politicians came to or through York on the campaign trail -- as Bill Clinton did in 1992 – they stopped at the Yorktowne.

Sinatra. Cronkite. Tony Bennett. Lucille Ball. They stayed at the Yorktowne.

The Yorktowne went through changes over the years - such as the construction of a parking garage and seven-story addition in 1957.

The black-and-white terrazzo flooring was covered up by carpet, and several murals were hidden behind drop ceilings and sheetrock.

Hotel policy in its early years barred black people from staying there. Black musicians on tour would often stay at private homes instead.

A black bell captain once told a young Voni Grimes not to work at the Yorktowne because a black man could rise only so high there. But years later, when Grimes had achieved much working for other businesses in York County, he rose quite high at the Yorktowne -- he made a room on the sixth floor his residence.

In 2010, the owners of the hotel, York Hotel Group, defaulted on a loan and owed $5.26 million to PNC Bank. The hotel narrowly avoided a sheriff’s sale six months later.

The hotel was eventually sold to Starwood Property Trust. The group purchased the property as part of a portfolio of properties and took the Yorktowne as a contingent to the deal, Jack Kay, chair of the York County Industrial Development Authority, said.

Starwood wasn't out to get the Yorktowne. They didn't even want the Yorktowne, but they had no option. It was a necessity for Starwood to acquire the other properties.

The Yorktowne was circling the drain -- regular maintenance wasn’t happening, and there were no plans for a potential renovation or an update.

A past history of blight

Jack Kay had seen such plight before.

Around 2013, his real estate company, Susquehanna Real Estate, was contracted to make recommendations on the Hotel Sterling in Wilkes Barre.

The Sterling was built in 1897 and, like the Yorktowne, was once considered the city’s largest and most luxurious hotel.

But it was boarded up in 1998 after its owner failed to pay a $227,000 electric bill, local newspapers reported.

A small fire broke out in 2000.

And after a flood in 2011, it was finally condemned.

Kay’s group recommended removing the cancerous property – it had endured too much physical trauma and was left to rot for so long that it wasn’t financially feasible to save.

“It was such a blighting influence in that part of downtown, it could not be allowed to continue,” Kay said.

It was demolished in 2013, and the city holds a $570,000 lien on the site for the cost of the demolition. The Hotel Sterling site has had several potential projects eyed for the land, but the space remains vacant.

From guides to buyers

By 2015, Starwood was ready to unload the Yorktowne. The York County Industrial Development Authority and Kay, the chairman of the group, were watching, hoping to ensure a good outcome for whoever bought the property.

Starwood first listed the property for sale at $4.3 million and there were some prospects, Kay said, but the potential uses for the historic Yorktowne were not appealing.

One option was a low-end hotel, with little money slated for renovations – more boarding house than hotel, Kay said.

Other suitors also underwhelmed.

Kay remembered the fate suffered by Hotel Sterling.

“The property was too important and too critical… to let it just go by chance, particularly if there was a negative use that came from it,” Kay said. “It would take the air out of the balloon of everything going on, and that wasn’t going to be allowed to happen.”

So Kay led the charge for YCIDA to buy the Yorktowne. By the end of 2015, the deal was done.

In a sign of the depreciating value, the authority purchased the hotel for $1.8 million, just north of the $1.175 million it took to build it in 1925 and less than half of the $4.3 million the hotel was originally listed at by Starwood.

The YCIDA had tackled other large projects – mainly the development of a minor league baseball stadium in York and Harley-Davidson’s ultra-modern West Campus just outside the city. Kay credits that new plant for Harley's recent decision to divert jobs from Kansas City to York.

But the Yorktowne would be even larger, with an estimated $30 million budget.

An operator with a local touch

Ken Kochenour and GF Management kept an eye on the Yorktowne Hotel for more than a decade.

The company explored operating the property in the mid-2000s, but at the time, it made no financial sense, said Andy Taymans, vice president of asset and revenue management at GF.

But by late 2016, York was a different place, and when the YCIDA interviewed for operators, they threw their hat in the ring.

“York has come a long way in the last five years and we see it coming even further,” Taymans said. “We had the advantage of watching things over the years… the evolution of the restaurants downtown, the introduction of small breweries, the core of downtown being more walkable.”

About a dozen potential operators interviewed, Kay said, but GF stuck out for several reasons:

Both sides shared the view of a modern hotel that kept the Yorktowne’s history

GF Hospitality had prior experience working with top tier hotel brands, such as Hilton

They had experience in the area, previously owning a hotel along Route 30.

GF also had a champion for York in Kochenour – the co-founder of the company who grew up in York, graduated from York College and still works with the college.

“He’s always felt like whenever this made some sense, we wanted to be a part of it,” Taymans said. “It’s a matter of pride for your hometown and being able to do something and bring something back.”

Kay recognized the company’s commitment immediately.

“They knew the York market,” Kay said. “The York connection, while of itself wasn’t the deciding factor, it was helpful in getting comfortable with them.”

Tapestry becomes the target

The YCIDA considered having independent operators run the hotel, but ultimately they decided that bringing in a national flag was more beneficial to all parties involved.

GF Management explored a number of hotel options, but it was Hilton’s Tapestry Collection that fit the Yorktowne best.

Tapestry is a new brand, launched in 2017, featuring boutique hotels such as The Graham in Georgetown. The brand weaves the hotel’s unique features with the benefits that come with being a Hilton brand – such as Hilton’s rewards program and large-scale reach.

“Hilton in your downtown – that’s a prestige factor,” Kevin Schreiber, President and CEO of the York County Economic Alliance, said. “Cities that have a national corporate brand in (their) downtown cements the downtown’s viability. It not only opens up the Yorktowne to that national exposure, but to your city.”

The Hilton pitch

Convincing Hilton wasn’t easy – multiple months worth of work, hundreds of pages of forms and multiple visits with officials from Hilton. The decision would run through numerous financial analysts, committees and boards before a final decision was made.

Throughout the process the YCIDA had to sell not only the currently vacant hotel, but the city and region as a whole, and they had to focus on three main points:

A proven track record – The York community does things well – the Appell Center for the Performing Arts, York Revolution minor league baseball team, the sustainability of Central Market and the current investment in downtown.

An engaged community – Events such as First Fridays and the number of restaurants that have opened, grown and flourished near the hotel

A new working relationship - The Yorktowne will work closely with York College where students from the hospitality management program become a feeder system for the hotel, GF Management or other properties GF owns.

The relationship benefits both sides, said John Hughes, chairman of the hospitality management program at York College. But it also is a chance for York College to become more invested in the downtown.

“This is where we live,” Hughes said. “This is where we lay our head… It’s our city. You don’t pick up York College and move it like companies can.”

Louis Appell's vision for York

In its pitch to Hilton, the YCIDA fought off questions about crime and negative perceptions about the city -- often made by those who don't live in the city.

Hilton had access to all of that -- their officials can do a quick Google News search too -- but to the company's credit, Hilton moved past it fairly quickly, Kay said.

Even so, those negative views of the city were frustrating. How a city portrays itself affects those considering that city for a job, businesses looking to relocate and students applying to college, Kay said.

In those moments, Kay's thoughts became W.W.L.D. -- What Would Louis Do?

Louis Appell Jr. was Kay's boss and mentor for 30 years at Susquehanna Pfaltzgraff. He was known for his philanthropy and dedication to York. Appell, through his company, owned the Yorktowne in the 1990s along with a group that included the Wolf Organization.

Appell was arguably York's greatest champion at a time many had left it for dead. His view of York was always half full, and his positive influence can be found on many of York's biggest projects.

He was aware the YCIDA wanted to buy the hotel, and, in the months before his death in 2016, was a strong proponent of the move, Kay said.

While Appell's blessing on the project was a positive, his positive outlook was more influential -- especially for Kay, who revered him.

While Kay certainly couldn't change the facts Hilton saw, or change the opinions of online trolls, he could still tout York's positives.

The glass was half-full, and the YCIDA needed Hilton to see it the same way, Kay said.

‘A Yahtzee moment’

Those involved in a potential deal from the Yorktowne’s side carried the same tepid confidence – everyone thought a deal would get done, but weren’t going to celebrate until there was a final notice.

Signs that things were moving positively – mainly a heads-up from an analyst, more questions from Hilton, confirmation that Hilton liked the property and the relationship with the college -- only supported their hope.

Taymans, too, felt confident, but it wasn’t until after a conference hosted by GF Management in Valley Forge where he fully believed a deal would get done.

There, Hilton execs spent nearly a day-and-a-half with Kay, Taymans and YCEA Director of Strategic Development Blanda Nace. It gave them enough time to fully sell the Yorktowne, the plan and what was on the horizon, Taymans said.

In March, Kay received the confirmation he’d been waiting for – several emails from Hilton with PDFs needing to be filled out.

“It’s like getting your acceptance letter to your first-choice college,” Kay said. “The staff, particularly the YCEA staff, we’re all thrilled.”

Schreiber added, “We knew it was heading in the right direction, but each level of approval process… helped assure the next one. It was a Yahtzee moment.”

Yorktowne Hotel to be part of Tapestry Collection by Hilton brand Business leaders announced the new partnership with Hilton in a press conference outside the hotel.

What’s next?

On May 15, Kay, Taymans and Schreiber announced the Hilton deal to a large crowd gathered underneath the awning of the hotel.

For the first time since they found out the news weeks earlier – and had to keep it contained under orders from Hilton – they were able to celebrate.

Construction continued on the hotel above the announcement. Workers demolished several floors of rooms in anticipation of rebuilding them. The old Terrazzo flooring, once hidden, was uncovered and revealed to be in good shape – a minor miracle, Taymans said.

The relationship between the Yorktowne and York College is underway, Hughes said. Three students interned with the YCIDA on the project this year, and several more are expected to work with them in the near future.

“Our students, they’re really fired up about this,” Hughes said. “What (Kay) has given us an opportunity to do is have our students participate in helping this project succeed and bring the prospective to the next generation of people who are going to be enjoying this city.”

‘We stand on the shoulders of giants’

The Hilton deal was months and years in the making and a project that showed that York had once again fought above its weight class.

“We stand on the shoulders of giants,” Schreiber said. “So many people have been working on the revitalization of the city and its continued progress for generations. It’s a huge testament to those people who helped bring our city back.”

Kay credited his staff, who he said always kept a positive attitude, even when things got tough.

“We’ve had a number of problems and challenges where you go, ‘what are we going to do’ and you can’t let your momentum be stopped,” Kay said. “(The staff had) a focus that we’ll get it done, we’ll overcome the problem.”

Taymans hated the thought of an empty hotel in the middle of downtown York.

"They're black holes," Taymans said. "It just doesn't make sense for what downtown is trying to do. Kudos to Jack and his team for having the forethought and the guts to save it."

Why is this hotel so important?

In 2005, the Marriott in downtown Lancaster was built, and with it opened up a lot of businesses in the surrounding area.

While the Lancaster Marriott is nearly five times the size of the Yorktowne, a similar impact can be made on a smaller scale – especially with Hilton’s backing.

“Aligning with one of the titans of the industry and their customer base… that’s very significant,” Hughes said. “The brand is going to bring people to the area.

“What does the future hold? You’ll probably see Hilton customers with disposable income that’ll get a chance to experience the attractions you and I enjoy in downtown York every day.”

For all involved, the Yorktowne isn’t just a hotel and a great business venture– it’s much more personal than that.

It was where Kay’s family held their family reunion. It’s where Schreiber, his wife and their wedding party stayed after his wedding.

Ask many York-area residents over the decades and they have their own Yorktowne stories – proms, weddings, parties and more.

“This building is the embodiment of so many cherished memories,” Schreiber said. “It’s a public good. It’s so much more than a hotel.”

Anthony J. Machcinski is the food reporter for the York Daily Record. Follow him on Facebook, @ChinskiTweets on Twitter or email him at amachcinski@ydr.com.