Redmond officials jumped in with both feet when they agreed to invest five times their original commitment to renovate the New Redmond Hotel.
The Redmond Urban Renewal committee last month increased its commitment to the renovation of the 90-year-old hotel by funding $3.53 million. Long considered the cornerstone of downtown renewal, the hotel is projected to bring in $3.1 million to downtown businesses in the first year of operation and attract new business, according to city estimates.
Initially the City Council, acting in its capacity as the city’s urban renewal agency, agreed to grant $670,000 in redevelopment funds. After the developer, Alpha Wave Investors LLC, dug into the property, the company realized it would cost more than the initial estimates of $2.8 million to renovate the hotel.
The developer is building a rooftop bar, shared co-working space in the lobby and renovating all 48 guests rooms.
The property will be operated by Soul Community Planet, a hotel operator owned by Alpha Wave, which is a private equity firm.
It didn’t require much thought on the part of the city to up the ante, said Mayor George Endicott.
“The Chamber (of Commerce) and others pointed out that the hotel is an icon,” Endicott said. “Everyone believes the hotel will be a centerpiece of downtown redevelopment. That was the justification for doing it. The whole idea is to have a boutique hotel and then you have people with disposable income coming to us.”
The city will loan the developer $2.75 million provided the property remains as a hotel for 30 years, said Chuck Arnold, Redmond Economic Development/Urban Renewal program manager. Each year the property operates as a hotel, a proportionate share of the loan is forgiven, Arnold said.
An additional $830,000 will be loaned to the developer at a low interest rate, payable to the urban renewal agency, Arnold said.
“It’s been fascinating to watch this happen,” Arnold said. “The hotel will create a hub, and we want this to be a gathering place, a place that people can come to. Co-working space and restaurants attract people who aren’t even staying at the hotel.”
The developer underestimated the cost of renovating the property, Arnold said. In mid-November the city and the developer met and negotiated the agreement for the additional funds using a portion of the tax increment financing that was established for projects like this in 2010, said Jon Stark, Redmond Economic Development Inc. senior director.
The project has been a priority of a citizen’s advisory committee, Stark said.
“This is a catalytic priority project,” Stark said. “This is just over 3 percent of the total to get one of the highest priority and catalytic projects off the ground that will create jobs, entertainment and lifestyle options, services to the community and generate transient room tax dollars that will further our ability to market Redmond’s downtown to future visitors.”
The hotel, which is on the corner of Sixth Street and Evergreen Avenue, is listed on the National Register of Historic Places.
“The city of Redmond has been phenomenal to work with,” said Ken Cruse, CEO of Alpha Wave Investors LLC. “The pressure is on us now to get started on this.”
Cruse said he hopes the rooftop garden will open in May and the hotel shortly after.
“We’re in the process of finalizing our plans,” he said. “We will keep the front desk, the fireplace in the lobby and the vestibule.
“We want to create harmony with the historic features.”
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