Over nearly five years, The Westin hotel has been central to Providence’s renaissance, maybe even more so than the massive Convention Center to which it is joined.
And in its nearly five years, the hotel can boast of quality awards from its franchise and managerial groups, and what officials say has been financial success. Timothy P. Kirwan, the hotel’s general manager, said revenues exceeded $20 million last year and were $150,000 above projections.
Financial success, that is, if you don’t include yearly debt service on the bonds that were sold to pay for the $75 million construction project. That debt service amounts to about $6 million dollars a year, about a fourth of the overall debt service on the entire Convention Center-Westin project, said James McCarvill, executive director of the Rhode Island Convention Center Authority.
As it approaches its fifth anniversary later this year, the Westin finds itself at a crossroads. Proclaimed a success by those who manage it, Kirwan says there are important decisions that will be made in the next several months:
The Convention Center Authority is now discussing whether to sell the hotel. The Westin is reputed to be the only state-owned hotel in the country. The authority went out for requests for qualifications four months ago. McCarvill said the authority was meeting late last week to review a letter from its bond counsel, which would discuss how the authority could dispose of the property without jeopardizing the tax free status of the remaining bonds, and what the authority would have to do with the proceeds from the sale. The logical distribution would be to reduce the overall Convention Center Authority debt, McCarvill said. He said if the authority agreed with bond counsel, then it was prepared to ask those companies that had responded to the earlier request to submit formal proposals to purchase the hotel. McCarvill said that eight companies initially expressed interest, and that among those are the Starwood Corp., owners of the Westin Hotel franchise, and Patriot American, which had purchased a part of Carnival. He would not disclose other potential bidders.
The hotel has proposed a 300-room expansion to the 363 rooms it currently has. The financing of the new tower, however, appears to become complicated as Convention Center Authority officials grapple with the dilemma of seeking additional public funding or going with a private developer.
When the hotel celebrates its fifth anniversary, it will also be renewal time for both the franchise agreement (the Westin name) and the management contract (Carnival). Kirwan said both are interested in renewing and, in fact, could be interested in bidding for purchase of the building.
And throw into the mix, the number of hotel proposals that are floating around the city, from an upscale renovation of the Masonic Temple to a Hilton Hotel next to the Citizens Building. With the exception of the Marriott Courtyard, which is under construction across from the Westin, all of the other proposals are either still just proposals or are proceeding through the permitting process.
McCarvill said the Convention Center Authority is thrilled with the plans for additional hotel rooms. The lack of hotel rooms has been a major concern of Convention Center and tourism officials, claiming the city simply doesn’t have adequate hotel space to accommodate larger conventions that could be booked into the Convention Center.
McCarvill and Kirwan, however, agree that there is some uncertainty whether the city can support all of the hotel rooms that are being planned.
“If all the projects were built, we’d be overbuilt,” Kirwan said. “Somebody would fail.”
Bur Kirwan also said the success of the Convention is tied to the new developments, including the expansion of the Westin and its sale at some point. The most obvious and immediate benefit of a sale would be eliminating the $6 million annual debt service payment the state is making on the bonds that financed the building of the hotel.
For the Westin there are other immediate developments. The completion of Providence Place and its connection to the Westin will mean some reconfiguration, Kirwan said, to the second floor, so the hotel can capture some business from shoppers at Providence Place.
Changes are also taking place at the hotel’s Agora restaurant, where Kirwan said there is a new chef and new management, an athletic club has opened within the hotel, and the hotel’s first floor will be used solely for guest arrival and social functions.
But most of all, Kirwan said he has seen changes in not only the city, but over the five years he has seen a change in how Rhode Islanders view themselves.
“There have been changes in the Rhode Island attitude,” Kirwan said. “The cynicism is dissipating, the doomsayers are gone. People told me I was crazy coming down here.”
Before coming to Rhode Island, he was president of Signature Concepts International in Boston for three years, and before that managing director of The Bostonian Hotel.
He came to Providence in an atmosphere of skepticism about the hotel and Convention Center, but with considerable plans to make the area more of a destination, “a great destination,” Kirwan said.
The new airport terminal and the arrival of Southwest Airlines and more competitive airline rates have been major contributors, Kirwan said, and now he’s finding business people choosing to stay in Providence over Boston, when doing business in the area.
For the future, Kirwan said he is concerned that officials don’t “allow enthusiasm for economic development to destroy the integrity of the destination.”
At the Capital Center, he’s concerned that construction is consistent with “core values,” meaning that that buildings reflect the architecture of surrounding buildings, preserving the area’s sense of history.
