Published by: Stan Bullard/Crain’s Cleveland
Published date: March, 2024
An oft-repeated joke among Northeast Ohio hotel owners and managers is that it’s not an overbuilt market, it’s an under-demolished one. In the wake of the COVID-19 pandemic, though, that may no longer be true.
A study of the Cleveland-Akron hospitality business by David Sangree, president of Hotel & Leisure Advisors of Lakewood, shows that 15 area hotels, with about 2,105 rooms, have closed or been demolished since the pandemic began.
Some may reopen if a new owner buys the site. However, financing is hard to swing, and there is competition from other types of projects for the best locations.
The list ranges from tiny properties on the edges of the market to some big ones near the center of town.
A landmark property that has been closed since the pandemic hit is Quail Hollow Resort in Concord Township. The 176-room hotel and its event center are the subject of a consulting study that the Concord/Painesville Joint Economic Development District (JEDD) is in the process of commissioning to plumb the 13-acre property’s next use.
Rita McMahon, JEDD administrator, said in a phone interview that the local governments believe it is important to work with the hotel’s New Zealand-based owners and its Arizona-based manager, Pandey Corp., because it is such a large property overlooking I-90 next to commercial and residential developments in the township.
“We’ll try to determine what kind of uses are appropriate for the site,” McMahon said. “The property isn’t listed but the owners say it is available for sale. Could it be apartments? We’ve heard the idea of senior assisted living discussed for it. We want to have a sense of that in case any type of zoning changes need to be made.”
The property also has significance beyond its size in Lake County.
“For anyone who grew up in Lake County,” McMahon said, “they know it as the place where banquets and major events were held.” The property is surrounded by townhouses and the Quail Hollow Golf Course. The study has been awarded to Silverlode Consulting Corp. of Cleveland, but the contract is awaiting final signatures.
“We’ll have a meeting for public comment after the study is complete,” she said, likely in May.
Two hotels in Beachwood have been in transition. A new dealership for Beachwood Porsche is taking shape on the site of the former Fairfield Inn on Orange Place. The 158-room limited-service hotel has gone through several ownerships over the years before it was bought by an affiliate of Penske Automotive Group to replace its current Chagrin Boulevard location.
Nearby, the 404-room Doubletree by Hilton sits idle on Park East Drive. It was shut in April 2020 in the lockdown phase of the COVID-19 crisis. The property is owned by an affiliate of real estate developer Chad Kertesz’s MyPlace realty development and management firm of Cleveland.
Kertesz has not started work on the property. He leads an investor group that acquired the inn for $12.4 million in 2021 from a lender. Neither Chad nor Svetlana Kertesz returned three phone calls and an email from Crain’s Cleveland Business about the project or whether it might be put back to use as a hotel.
Meanwhile, the closed University Hotel & Suites, at 3614 Euclid Ave. in Cleveland, was put on the market Feb. 23 by New York-based Crimson Capital, which owns it through an affiliate.
The 10-story hotel is scheduled for an online auction beginning April 8 on the Marketplace website, with Paramount Lodging Advisors of Chicago serving as the broker. The property dates from 1964 and occupies a hard-to-find, 2-acre site in MidTown Cleveland’s major artery.
Also awaiting a demolition crew is the 243-room Sheraton Cleveland hotel. Cleveland Hopkins International Airport purchased the eight-story hotel in 2022 in order to add more parking to the eternally parking-shy airport. An auction of its contents was completed in early February as the airport looks to demolish the property later in 2024.
The 130-room Super 8 Hotel in Brook Park was demolished in 2022 by the city of Brook Park, which bought it to put an end to police calls and complaints about the property. The city wants to see it redeveloped.
Another five hotels, ranging from as few as 12 rooms to 98, are listed as closed. However, they may be put back into use should a would-be hotelier manage to acquire them.
With locations on or near major highways or in well-established, densely populated suburbs, real estate developers often mine old hotels for their sites.
Such was the case at the La Siesta Hotel in Strongsville. The 38-room property was demolished in 2020 by WXZ Development of Fairview Park to make way for a Starbucks and other future retail.
Bhavin Patel, a principal at the Solon-based Spark GHC Hotels group, said existing owners of hotels face big problems if they do not have financial resources to update them to meet franchise requirements.
New brand names by hotel companies also create development pressure for old hotel sites as operators seek to capture the next generation of travelers.
While a burst of hotel development seems an outlandish idea as the run-up in interest rates sapped much real estate momentum, Patel, whose group has been aggressively buying hotels in need of updates, sees the same opportunities Sangree does.
“When we get the next two rate cuts, we’ll see more lenders willing to lend,” Patel said.
