The Case for the Resurrection of the McCurdy as a Historic Hotel
By: Joe J. Wallace
Much adieu has been made over the delays and obstacles faced by the City of Evansville in their quest to entice or incent a developer to invest in a downtown hotel. The stated reason for needing a hotel serve The Centre as the convention business of Evansville is simultaneously resurrected from the grave that what will be at least a four year period without a hotel has put in into.
The travails of the city government in first failing in the effort to finance a deal to turn the McCurdy into apartments coupled with the ongoing saga of the preferred convention hotel to replace the old Executive Inn has forced Evansville to take a good hard look into the economic mirror. My analysis and articles have consistently predicted that the McCurdy is not a financially viable project as apartments and the four year saga that failed to result in financing has proved that analysis. Similarly, my analysis that the market value of a new 220 room hotel adjacent to the Ford Center is not sufficient to attract an experience private developer has also been proven by the continuing struggle to get to the starting line on that project with at least $11 Million (including the present value of proposed tax abatements) if taxpayer dollars needed to seal a deal.
Faced with these realities, I along with a few others have floated the idea of resurrecting the McCurdy not as apartments but as the Grand Historic Hotel that it should rightfully be. The McCurdy enjoys the distinction of being on the National Register of Historic Places. Furthermore the intrigue of staying in a hotel that has hosted celebrities such as Katherine Hepburn, Clark Gable, Senator Joseph McCarthy, and even President Richard Nixon lays the framework for a successful marketing plan and who knows, maybe even some assistance that is not available for new construction.
The Numbers
As an apartment building with 90 residential units at market rates of $1,000 per month and an 85% occupancy rate that is typical for Evansville the McCurdy will have an expected revenue stream of $76,500 per month. As a hotel that has 160 rooms at a typical rate of $85 per night and 58% occupancy the expected monthly revenue of the McCurdy increases to $240,000 per month, an increase of 214%.
As a hotel the McCurdy will utilize much of the elegant old dead space such as the lobby and a rumored beautiful top floor restaurant and ballroom. All of these activities have the potential to increase the revenue as profit centers of their own.
Simply stated, if the problems securing a financial package to turn the McCurdy into apartments were valuation related, as a hotel the valuation will be roughly 3 times higher and may just get the deal into the realm of financial reality.
The Benefit to the Community
A recent study concluded that there is an immediate need to add about 160 rooms to downtown Evansville to support conventions. The McCurdy will fill that need while enabling Evansville to re-energize one of its most prominent historic structures in its highest and best use. This will buy the lot where there Executive Inn was several years in which the convention business can be re-established and expanded such that a private investor may find it attractive to bring the 4 Star Hotel that was first promised to the MLK Entertainment Complex.
There are those who would say that “six blocks is too far to walk†so the McCurdy can’t fill the needs for a convention hotel. Those people are wrong. Chicago’s McCormick Place in particular is further than that from any hotel and is booked nearly every day of the year for some convention. Six blocks may seem like a long way to a sedentary local resident, but to the kind of people who will be flying in for conventions walking six blocks is a routine part of life.
The McCurdy as a hotel would also be a short yet pleasant stroll to the Aztar complex. For visitors who are reluctant to take that walk I am sure that Aztar will send a shuttle for them. It is also a certainty that the McCurdy could provide shuttle service to the MLK Entertainment Complex. The early successes of the Ford Center and the 55 year success of Roberts Stadium prove that these kinds of venues do not need a hotel to sell out concerts and ball games of local interest.
Long Range Vision
At some point in the future there is the potential to have a Historic Hotel on the Evansville waterfront and a 4 Star Hotel that serves the Centre. The most logical path to that reality is to first develop the McCurdy as a hotel while re-establishing the convention business base and to follow that up with a real 4 Star Hotel funded with investor dollars in a better economy.
By following this approach downtown Evansville will get the 160 rooms that it needs now and the time to establish the business base and value that will minimize public funding requirements of a future 4 Star Hotel. It is time for any interested developers in resurrecting the McCurdy Hotel to its former elegance and operating a profitable business that will benefit Evansville to come forward before time and the distractions on MLK cause it to be too late.
Could you find us an example, or examples, of an old hotel in this state of repair being restored to profitability?
The Seelbach and Brown Hotels in Louisville have a similar history of being closed and brought back to life. There is one in Boulder, CO that I have stayed in that was similar and it has been in operation again since the 80’s. There is actually a historic hotels organization at the following site http://www.preservationnation.org/travel-and-sites/travel/historic-hotels.html. Then there is French Lick and the Columbia Club in Indy. There are many such examples. I do not have their financial results but to continue to operate they must either make money or have a benefactor.
The one clear thing is that the ones that provide a quality experience can succeed but flophouses won/t. It the McCurdy is to return to its glory the developer will need to understand and appreciate just what GLORY really means.
The Renaissance Hotel in Downtown Indy is about 15 blocks from Market Square and convention activities; quite nicely appointed with bay window in each room, 4 poster beds and kitchenette units with microwave and refrigerators.
I stayed at the Omni Majestic Hotel in St Louis a few years ago….it fits the bill and was a very nice hotel.
http://www.omnihotels.com/findahotel/stlouismajestic.aspx
JMHO
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: an expression of good wishes when someone leaves : farewell
â–ª She bid/wished me adieu.
ado – noun
: foolish or unnecessary talk, trouble, or activity — often used with “much”
â–ª There has been much ado about the need for campaign reform.
â–ª The controversy turned out to be much ado about nothing.
Mr. Wallce, you make make excellent points. However, the current ERC could never understand that it is possible to use the historic McCurdy hotel building as a hotel.
I have said for the longest time, we should call Steve Wynn up on the telephone. He has the access to capital and the vision to turn this property into a thriving luxury hotel once again. But what do I know? I only put myself through college working in the entertainment industry at a time when people paid $7.50 cover charge two drink minimum just to get into the old Showroom Lounce at the Executive Inn.
Or even Carl Icahn who already owns Tropicana that owns Aztar. I bet he has never even been here yet he owns Casino Aztar. Being a billionaire has its privileges
I will say it again. Federal tax credits are a nice support for rehabbing historic properties. State credit are less so. Indiana is out several years in getting these credits paid because only so much money is allowed per year toward credits. To rehab the Mc Curdy would enhance the entire downtown and would allow for further historic properties to take advantage of such credits. Unfortunately there is much historic loss downtown. Has anyone thought to contact Indiana Landmarks? That would be very pertinent to do right now! This is the type of research that should have been done 5 years ago.
Historic hotels are wonderful. Redo it and they will come. Joe Wallace has the brains and imagination that this city needs in our future planning.
Agreed 100%. However the current ERC is like a dog watching TV when it comes to information requiring analytical thought.
What is the difference in overhead for apartments vs. a hotel? Hotels require a lot more employees. How much of that 214% increase will be ate up by employee expenses and increased requirements for furnishings, maintenance, and equipment?
Creating jobs should be our number one goal.
It takes eight real jobs to support one government job so lets get the government out of the private business and let the job creation begin.
Joe, several years ago, folks locally and from Indianapolis, Indiana, looked at this building. The conclusion was that as a Hotel, the building code was an issue, all of the wiring needed to be replaced, some issues on the concrete, the cost to redo into a decent, and the word is even “decent” hotel was HIGH for the price per square foot. I was told. One Developer from Indianapolis, In, I had looking at sites for a Hotel to locate here loved the possibilities of the McCurdy and was even asked by Scott Kosene to consider being a part of this years ago….the guy didn’t go with the idea and should have. He loved the building. He has helped to build several Landmarks in Indianapolis, IN.
(the same developer I asked to have help bid on the Thunderbolt Pass golf course and the Cty. Attorney stated ‘not enough money in the party’ and the guy was a Millionaire—not a term used to the new city atty. And, now,the Golf course is usual C Average stuff folks like that attorney is use to here. We liked Better and had support for it.) We were ‘this close’ to having a neat project already in the McCurdy if this guy helped. Even another possible Developer wanted to put a Luxury Condo in the Rosewood Room, staggering thought, with about 5 restaurants/bars there, remember….the guy even mentioned the boiler room with a bar….??? really?????. Good Luck with the hotel idea….tops in the state have looked at it, if it made sense they would have already done it, a few years back. Multi-Millionaires who have experience in Hotels didn’t purchase it. The Building Code and the cost per foot was what I was told on it, didn’t make sense. This building has to have a Mix of things going on to make money at it. Sure, a Hotel could possibly generate money faster, but, the rooms would have to have at least one wall with another entrance to it to even make a livable Hotel room size. And, how about plumbing. This building will cost a LOT whatever they put in it. Who knows what will happen to the McCurdy, hope it is the best possible solution. Good Luck! to who ever! And, for whatever it will be. If another Hotel is thought to be in it….I’d be surprised. Good Luck!
I realize this is an old article but the McCurdy did become apartments and I live there now. It is horrid. You can hear everything your neighbors say and smell what they are having for dinner. The elevator is broken every other week, the roof leaks into the lobby, and the maintenance staff has been let go in favor of cheap day labor. The worst part is the management. The property manager Whitney is rude and totally unprofessional. This place was marketed as a “luxury apartment for young professionals.†It is more like a college apartment. Also we were told a coffee shop and barber shop would be in the lobby. The coffee shop opted for another location and the barber shop never opened. No one is renewing their lease and the city has placed a 1 million dollar lien against the property due to the Kunkels not paying a water bill. This place will be belly up in two years.
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