Coming Soon to the Old Dallas Plaza Hotel on Akard: a Holiday Inn & Suites

Categories: Biz, Housing

DallasPlazaLoopnet.jpg
LoopNet
The future seemed bright for the Dallas Plaza Hotel in 2006. Developer Larry Hamilton, fresh off a slew of successful downtown redevelopment projects, had just purchased the seedy, 12-story complex on Akard Street just across Interstate 30 from City Hall with plans to turn it into a boutique hotel. Construction was set to begin later that year.

Those plans fell through. A few years later, neighbors scuttled Plan B, a partnership with Central Dallas Ministries (now CitySquare) to invest $25 million to turn the building into affordable housing. That seems to have been about when Hamilton mothballed the building, posting an ad on Craigslist for caretakers who would keep vagrants out in exchange for free rent.

Now, Plan C. Slated to go before the City Council in December is an application for an $11 million U.S. Housing and Urban Development loan that will fund the purchase and environmental remediation of the property for a development that will bring an estimated 90 permanent, full-time jobs and ameliorate an eyesore near downtown -- namely, a Holiday Inn & Suites.

Charles Brideau, assistant director of the city's housing department, said the deal has been in the works for several months. The HUD loan won't go to Holiday Inn or the city but to the Texas Educational Opportunity Fund, a nonprofit that, best as I can tell, is affiliated with CitySquare, which I've called, but I haven't heard back from them yet.

Brideau estimates the project will take about six months, though he's not sure; this is only the second commercial development his office has done, the first being Lake Highlands Town Center. That's all assuming the loan is approved by the council following a period of public comment, and then by HUD. If not, it'll be on to Plan D.

Update at 5:32 p.m.: Hamilton, with whom we had left a message, called to explain things a bit more.

"First of all, we basically had a hotel financing market that went into the toilet in 2008, and it hasn't really emerged," he said. That killed the plans for the boutique hotel. In the meantime, the city opened the Omni, which has prompted an uptick in convention business which in turn prompted Holiday Inn to give Hamilton's company a franchise.

The Texas Educational Opportunity Fund will, which is affiliated with CitySquare, will hold the title to the property, with Hamilton's company handling the development. Right now, they're waiting for financing to fall into place, but he's expecting to start remediation work next summer.


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10 comments
VETT
VETT

Might as well go on to "plan- D" because HUD will not finanace this property!!! Wait and see!!!

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

The Omni financing has paid off.  To all the naysayers: BTFSPLK!!

MikeDunlap
MikeDunlap

I live across the street and months ago saw a rendering Larry had made. Would certainly be an upgrade over the eyesore the building is now. Hopefully he can get it done.

holmantx
holmantx topcommenter

Meanwhile you can rent a room at our Omni Convention Center Hotel for $113 a night - FAR below breakeven.

Just go to Hotwire, punch in the zipcode 75201, and choose the on;y 4.5 star hotel down town.

DOCensors
DOCensors

Guess that means the guy who has been living there rent free for years has to move soon

Bill
Bill

@VETT I am sure they are smart enough to know this aint happening. Move on Hamiltons. Its over. 

theslowpath
theslowpath

@holmantx That's just how hotels and airlines work. It's called price discrimination. The business travelers pay full price; the discount stays (or seats on an airplane) go to the price sensitive customer. Those rooms or seats would be empty at full price, so the business drops it until it fills. It doesn't mean the overall business model is faulty or unprofitable. 

MikeDunlap
MikeDunlap

@holmantx

An oversupply? Is that why the Joule is expanding, why Nylo just opened a new hotel down the street from the convention center, and why Hilton is opening a Homewood Suites tower on Elm in a few months?

Apparently people actually invested in the industry know something you don't.

holmantx
holmantx topcommenter

@theslowpath @holmantx Downtown has an oversupply of rooms. The Omni introduction exacerbated that condition.  The premise was that the Omni would increase demand thus raising rack rates and occupancies.  The recently transferred Omni manager told me they were eating into other hotels instead - it ain't happening.  

It is why the Omni rooms are showing up on the discount aggregators. They are competing with the hotels WHO DO have to pay occupancy taxes and property taxes hence, the taxpayer hotel is exerting the opposite effect upon the downtown market - the purpose it was introduced.

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