Hotel advisory firm tells work group it is “well-capitalized” and eager to put a Hotel Indigo on Alexandria’s waterfront. As seen in Old Town Alexandria Patch
By Sharon McLoone
Carr Hospitality this week assured members of the Waterfront Plan Work Group that it is a “well-capitalized” company after allegations were made that the firm was linked to bankrupt properties.
The Washington, D.C.-based hotel advisory and investment firm told work group members at an Oct. 19 meeting that it was interested in putting a Hotel Indigo, a brand owned by InterContinental Hotels Group, into the Cummings warehouse on S. Union St.
Concerns at the Oct. 19 meeting were raised over the financial situation of a proposed Hotel Indigo in Baltimore. The owner of the building slated to house that Hotel Indigo filed for bankruptcy to avoid foreclosure last summer.
In an Oct. 27 letter to work group chair and City Council member Paul Smedberg, Carr Hospitality CEO Hammad Shah wrote: “I am writing to assure you that Carr Hospitality is a well-capitalized company and is not involved in any bankrupt properties. I remained convinced that the Cummings property is an excellent site for a well-designed boutique hotel which will be an asset to the community.”
James Vidmar, a bankruptcy attorney with Yumkas, Vidmar, Sweeney & Mulrenin in Annapolis, who represents the Baltimore building’s owners, 207 Redwood Management, told Old Town Alexandria Patch that the bankruptcy “has nothing to do with the Indigo brand itself.” Redwood Management is not affiliated with Carr Hospitality.
“Hotel Indigo is just the brand like a Holiday Inn or Hilton,” he explained, adding that in the case of the hotel in Baltimore, a group of people got together and tried to privately finance the building of the hotel, but ran out of money partly because of construction overruns and complexities to renovate the historic building.
“We hope that we get through our court battle, and we hope that it’s a Hotel Indigo,” he said, adding that it should open in 2012.
The concerns were voiced by an active member of advocacy group Citizens for an Alternative Alexandria Waterfront Plan, which opposes the city’s plan over issues with density and zoning, among other things.
“The general question for us is what are the appropriate uses for the waterfront — whether it be a hotel or town home development as well as the environmental impact,” said CAAWP co-founder Andrew Macdonald.
CAAWP volunteer and Old Town resident Leigh Talbot, who is also a chartered financial analyst who has experience analyzing the hotel industry, said most hotel chains don’t actually own their hotels. For example, InterContinental Hotels Group owns 15 of its hotels, or less than 1 percent of its portfolio.
“We have to look at developer risk and unfortunately the Hotel Indigo has partnered with developers that have financial problems,” Talbot said. “What do we know about Carr Hospitality? They own a handful of hotels. They are not a big company. What happens if we find ourselves with a developer that runs into difficulties? I’m not saying Carr will, but that’s something to think about — developer risk.
She added that a hotel on the waterfront does not make good business sense for the city for many reasons, including the financial drain a new hotel will put upon the existing hotel base by attracting their potential customers.
CAAWP plans to release its alternative plan on Oct. 30 at 6 p.m. at the Athenaeum in Old Town.