Developer says new Old Port hotel will fill need despite explosion of Portland hotel rooms
PORTLAND — A local developer proposing a new Old Port hotel said Tuesday that demand for hospitality services in Maine’s largest city bucked national trends and continued growing through the recession.
Tim Soley, president of commercial real estate firm East Brown Cow, said his proposed 123-room Canal Plaza Hotel would still feed what remains a need in Portland, despite several other hotel projects in the city recent years.
Soley said his group commissioned a study by Pinnacle Advisory Group in researching the hotel project, and found that while regional hotel occupancy rates are below 60 percent across an annual average, occupancy in Portland is above 70 percent – the threshold at which many hospitality experts suggest more capacity is necessary.
Soley said the high occupancy rates have been maintained in the city even while the economy has been down and local capacity has been added – with a 40 percent increase in rooms in recent years through projects such as the expansion of the Portland Harbor Hotel and construction of a 122-room Hampton Inn. He said average revenues per available room has increased since 2009, providing another encouraging metric for developers.
According to Smith Travel Research information distributed by the Maine Innkeepers Association in May, the average daily rate – the room revenue divided by the number of rooms occupied – in Portland grew to $83.83 in 2012 from $80.44 the previous year. In terms of revenues per available room, the city’s figure increased from $34.71 in 2011 to $35.54 in 2012.
“If you look at the Smith Travel report data, the reason you see so much demand here and interest from parties all over to build hotels here, is that from 2006 to 2012, hotel dollars have doubled,” Soley told the Bangor Daily News on Tuesday.
He added that in addition to a slowly recovering economy, hoteliers have cause to be optimistic because of the steady cruise ship activity Portland hopes will continue and recent news that ferry service to Nova Scotia could return.
“This has been happening in the face of what’s been a tough economic backdrop, and when the economy rebounds, it could be leveraged even further,” Soley said. “There are a lot of things that will create far more additional activity in Portland. The wave of development being proposed for portland is not just in hospitality, but in residential.”
Planning Board member Patrick Venne said he was bracing for complaints that Portland is oversaturated with hotels during Tuesday night’s workshop, but those arguments never came.
“Typically, when you say the word ‘hotel,’ people get up in arms about it,” Venne said. “But that wasn’t the case here. And I think it’s a great location for a hotel.”
East Brown Cow was primarily represented during Tuesday’s workshop by consultant Greg Shinberg.
The proposed Canal Plaza Hotel would stand approximately seven stories tall at the corner of Union and Fore streets, adjacent to a parking garage also owned by East Brown Cow. The building would include about 1,000 square feet of retail space at the street level as well, according to an East Brown Cow announcement issued Monday.
Patrick Costin, head of building designer Canal 5 Studio, described plans for the hotel in a Monday statement issued by the developers.
“An exciting challenge for us was the client’s specific request for a contemporary palette of granite, glass, metal and composite materials for the exterior with the intent to create a building that energizes this corner of the Old Port,” Costin said. “Our proposed design presents a 21st century sensibility while responding to the context of the Old Port. This is achieved by incorporating transparent ground level retail and hospitality space and a setback on the seventh level to reduce the building height along Fore and Union streets.”
The Canal Plaza Hotel is the latest in what has become a flurry of economic development activity in Portland. A seven-tower mixed use residential and retail project is being proposed for former scrap- and railyards in the Bayside neighborhood, for instance, while another 180,000-square-foot condominium and retail project has been approved for part of the former Jordan’s Meats factory site on Middle Street.
Another 94 market-rate apartments, parking and more retail space is being proposed for the former Village Cafe restaurant property on India Street.