HOUSTON CHRONICLE - Business Secton, Friday, Dec 19th
IT'S EARLY IN GAME FOR HOTEL
Location cuts both ways for Inn at the Ballpark by Ralph Bivins
...continued from Published News
Most of Houston’s off-season baseball news has centered on the Astros signing of pitcher Andy Pettitte and the possible return of hometown hurler Roger Clemens. But Houston businessman Tilman Fertitta, chairman of Landry's Restaurants, Inc., is hoping to catch some of that buzz with some baseball-related news of his own. Fertitta is preparing to unveil Landry’s newest project; a 201-room boutique hotel christened Inn at the Ballpark, across the street from minute Maid Park.
Fertitta is a big baseball fan. Present at most Astros games, he sits right behind home plate on the first row – arguably the best seat in the house.
He even admits to dreaming about buying the Astros. Fertitta said he has discussed the possibility with current Astros Drayton McLane, although he's never gotten serious enough to make an offer. For now he’s showing his passion for the sport with a $37 million hotel that opens Jan. 1.
The hallway carpeting depicts crossed bats, topped by a baseball. The bedspreads have baseball like stitching. And muted framed prints of baseball action hang in every guestroom. The hotel’s meeting rooms are named Fenway, Wrigley and Yankee, after the nation’s oldest and most storied stadiums. Even with the baseball theme, the hotel is meant to come off with sophistication, not with the iconic ambiance of a Little Leaguer’s bedroom.
“We have enough of a feel to make is special, but it’s very adult,” Fertitta said.
The hotel is the redevelopment of 12-story World Trade Center, which was built in 1962. Landry’s purchased the building from former Houston Rocket Hakeem Olajuwon about three years ago.
The building was gutted and rebuilt. Landry’s bought the remainder of the block and built Vic & Anthony’s, a high-end steakhouse.
The hotel, constructed with the aid of about $3 million in local tax abatements and rebates, is an anchor on the eastern end of downtown’s Texas Avenue. The Downtown Aquarium, Landry’s restaurant and entertainment complex with sharks, and aquariums and a Ferris wheel, anchors the western end of Texas Avenue. The Inn at the Ballpark will need all that charm because it is opening during a slump in the downtown hotel market.
Business travelers have been staying at home, or pinching their pennies, since the terrorist attacks two years ago. The emptiness in Houston’s downtown office buildings, caused in part by the shrinkage at Enron and other energy trading firms, also means there are fewer business travelers to sleep in downtown hotels. Several new downtown hotels, including the 1,200 room Hilton Americas-Houston, have recently opened or will open in early 2004. That additional supply of rooms will make things even harder for downtown hotellers, hotel consultant John Keeling of PKF Consulting said.
Year-to-date through the third quarter, local downtown hotel occupancy stood at 52.5 percent, down 10 percent from the first nine months of 2002, according to PKF Consulting. Through the third quarter, the average daily rate for downtown hotels was $154.92, down 5.1 percent from the comparable period of 2002. In this environment, hotel room rates are highly negotiable. But the hotel’s management expects to quote $200 per night for corporate travelers and $159 per night for a weekend rate.
Another strike against the Inn at the Ballpark is its lack of proximity to a significant number of office buildings. The hotel is on the northeast edge of downtown, away from the central core. It is three blocks from the nearest office tower. That means the Inn may not appeal to business travelers, who may want to be in hotels across the street from where they are doing business. “I’m sure it’s well-built and well-designed. But it’s a challenging location,” Keeling said. Still, Keeling said he was not ready to bet against Fertitta’s winning touch.
Landry’s also owns a Holiday Inn in Galveston, and a company owned by Fertitta himself, Fertitta Hospitality, owns the SanLuis Resort and other hotels. And Fertitta has a reputation for being adept at making money.
“I hate to underestimate Tilman Fertitta,” Keeling said. The Inn at the Ballpark is within walking distance to the George R. Brown Convention Center, and the hotel’s operators expect to get convention business as well.
But what the Inn at the Ballpark is really close to is its namesake – Minute maid Park. “If you had a good arm, you could throw a ball and hit it,” said the hotel’s general manager, John Fechter. The hotel is expected to sell out for the Major League All-Star Game in July.
But the 81 regular-season Astros games include only 13 weekend series, and that may not be enough to stimulate significant revenues at the Inn, Keeling said.
Fechter said the Inn will make every effort to book traveling teams that will play against the Astros. Traveling baseball teams and their entourage typically occupy 65 to 70 rooms on game nights, said Fechter, who was with the J.W. Marriott Hotel when it was they Houston hostelry for the San Francisco Giants.
Even if the hotel does become the resting-place of a big league club, fans shouldn’t expect to dial up a ballplayer on the hotel’s phone system. The hotels guard the players’ privacy, and players use assumed names when registering, Fechter said.
In the broader picture, it is also one of the first fruits from the seeds of redevelopment that were sewn when the baseball stadium opened in 2000. City fathers promised the new baseball stadium, which was previously called Enron Field, would stimulate rebirth in a part of downtown dominated by vacant lots, run-down buildings and the homeless.
After the stadium opened, Trammell Crow Co. was planning to build a 34-story tower of apartments and office space across the street from the left field wall. But Trammell Crow shelved those plans in late 2001, citing the uncertainty in the downtown realty market because of the decline of Enron Corp.
In 2001, the Hanover Co. built the 375-unit Lofts at the Ballpark apartments, just east of U.S. 59. However, the new Landry’s hotel is by far the largest project to blossom near the ballpark. “We feel like it’s a major part of the revival of downtown,” Fertitta said.
When plans for the stadium were unveiled about five years ago, a land rush erupted in the northeast part of downtown. Speculators and developers were all over the place – buying, reselling and submitting offers for land parcels that had been rejected for years.
Tracts that had been selling for $5 per square foot before the stadium was announced skyrocketed in value. Prices went over $100 per square foot, even up to $120 in some cases, said veteran downtown broker Reggie Bowman of r. Bowman Real Estate.
Many of the land buyers profited by converting the land into parking lots for ballgames, Bowman said. But the vision of the baseball stadium surrounded by wall-to-wall restaurants, nightclubs and new development proved to be a mirage. “It just hasn’t resulting in much construction,” Bowman said. The Inn at the Ballpark is a $37 million exception.