Jenna Pizzi

The News Journal

Buccini/Pollin Group on Monday announced plans to develop two hotel projects in Wilmington.

The Homewood Suites and Marriott are planned on the Riverfront.

Supporters say the projects will help drive more convention business to the city.

Three-hundred hotel rooms would be added to the Wilmington Riverfront under a proposal announced Monday by Wilmington-based Buccini/Pollin Group, which has led redevelopment efforts in the former neglected industrial area.

It is hoped the plan, if successful, will attract business travelers and boost the number of conferences in the city.

The developer said it has been given franchise approval for a 100-room Homewood Suites by Hilton and is in the franchise review process for a 200-room Marriot hotel. Both properties are planned for the Riverfront, but company officials on Monday would not release specifics on possible sites or when hotels could open.

“Both projects are in the early planning stages,” said Sarah Lamb, director of design and marketing for the development firm. “We look forward to sharing much more detail about the hotels once we’ve worked through the initial brand and municipal reviews.”

Officials said up to 200 jobs would be created, but would not discuss how the projects are being funded.

Buccini/Pollin also was the force behind the $40 million, 180-room Westin Wilmington Hotel on the Riverfront, which opened in 2014 and received loan guarantees of $1 million from the city and $3 million from the Riverfront Development Corp., a state-funded agency tasked in 1995 with revitalizing the waterfront.

RDC Deputy Director Megan McGlinchey said the organization as of Monday hadn’t been approached by Buccini/Pollin.

Wilmington Councilwoman Loretta Walsh, chairwoman of the council's Community and Economic Development Committee, said the new hotels should not receive any public subsidy, like the Westin did.

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"I'm not in the hotel industry, but I would think that with the amount of money that Buccini/Pollin has invested in the city, they would know what the bottom line is," Walsh said.

Any type of development in the city is good for Wilmington, Walsh said, but she is watching to see if public funds or land will be needed to complete the deal.

Jeff Flynn, Wilmington's director of economic development, said Monday that no city assistance has been requested for either hotel project.

The announcement comes as the state Department of Transportation is building a new bridge to connect the Riverfront with the Southbridge neighborhood. Construction of the crossing over the Christina River is expected to begin by late 2016 and will cost between $30 million and $35 million. The bridge will span from the end of Justison Street over the Christina River to South Market Street (U.S. 13).

The parcels between the Christina River and Interstate 95 have had extensive redevelopment in recent years, turning a former shipyard and empty lots into a hub of mixed-use and cultural amenities. The area now houses restaurants, Daniel S. Frawley Stadium, the Penn Cinema Riverfront 14 and IMAX, several housing developments and the Chase Center on the Riverfront, a 6,000-square-foot special events facility.

Buccini/Pollin also is expanding its apartment community on the Riverfront called The Residences at Harlan Flats. Phase two of the development will add 76 more units to the 116 apartments already built.

Rob Buccini, co-founder of Buccini/Pollin, did not respond to an interview request about the hotel investment, but in a statement, he said the new projects continue their commitment to the waterfront.

"The Riverfront is in yet another expansion phase and we want to make sure that hotel capacity is part of that group," said Buccini, whose firm also has numerous projects on Market Street and elsewhere in Wilmington.

Mayor Dennis P. Williams in a statement Monday said the hotel projects will make the Chase Center “more competitive as a destination for larger meeting, conference and convention business" and "help draw visitors to the various nearby attractions and entertainment options.”

Williams also is lobbying for the Riverfront Development Corp. to expand the Chase to accommodate larger events. He seeking funding for the $25 million project.

Bill Sullivan, chairman of the Greater Wilmington Convention and Visitors Bureau, said previously the Chase Center has been overlooked for small conventions because there was not enough hotel rooms in walking distance.

"Usually you need about 500 rooms to get small conventions," Sullivan said. "Buccini/Pollin have done their homework and it is going to make them much more competitive in that business."

McGlinchey said they’ve previously had requests from groups that were larger than what the Westin could accommodate.

“The business model that we have here at the center could support more hotels,” McGlinchey said.

But Paul Rada, the chairman of the Delaware Hotel and Lodging Association, is more skeptical that there will be a demand in Wilmington for additional rooms. The region has struggled to stabilize after a number of corporate exits from the state has left much space in the city's high-rise office buildings vacant, he said.

The merger between Wilmington-based DuPont Co. and The Dow Chemical Co. has many watching the corporate landscape acting with caution. The hotel industry in Delaware has struggled, but finally bounced back to pre-recession levels in 2014. That recovery is now threatened by a flood of new hotels, industry experts have said.

"I don't think we still have a really good idea of where (the merger) is going to take the demand for hotel rooms," Rada said. "It is a big question and if they have the money to throw at a question mark, God bless them."

Buccini/Pollin has recently expanded its influence in the hotel industry. The company recently acquired or took over management of five hotels in Pennsylvania, including the former Omni Hotel in Philadelphia.

Nearly a dozen hotels have opened in Delaware since 2013, adding more than 1,000 rooms to the market. Those new properties helped Delaware’s hotel room supply to grow by 4.6 percent last year, outpacing the national growth rate of 1.1 percent.

With these new properties, Buccini/Pollin is playing a big role in that saturation. With the two new hotels and the Westin, Buccini/Pollin will be increasing the total available rooms in the area by more than 400 in just a few years.

That rapid growth caused supply to outpace demand, resulting in a downturn in occupancy rates to 57.6 percent – a full percentage point drop. Nationally, hotel occupancy rates rose to 65.6 percent.

The oversupply has led state industry advocates to warn of a potential rate war, a battle of attrition that could result in closures and job losses.

"It is never a good thing for anybody if you overbuild a market," Rada said. "If they have created a marketplace where rates are artificially low because there is an extra supply, then they are kind of shooting themselves in the foot."

Councilwoman Hanifa Shabazz, whose district includes the area, is more optimistic and hopeful about job creation.

"When the Westin opened, there was a big job fair and they hired a large portion of their staffing from Wilmington," Shabazz said. "And even the construction jobs are great for our local small businesses, the unions and the community.”

Shabazz said the confidence that the developers have in Wilmington is also a promising sign for its struggling communities and businesses.

"With more rooms, that means larger conventions can come here,” she said, “and that will have a residual impact for our restaurants and retail boutiques.”

Staff writer Scott Goss contributed to this story.

Contact Jenna Pizzi at jpizzi@delawareonline.com or (302) 324-2837. Follow her on Twitter @JennaPizzi.

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