🔒CRDA weighs $4M investment to restore downtown Hartford Hotel, add needed rooms

Facing a shortage of lodging accommodations to support Hartford’s PeoplesBank Arena and Connecticut Convention Center, the Capital Region Development Authority plans to invest $4 million to support the renovation of a 64-year-old hotel overlooking Bushnell Park and the state Capitol. CRDA staff are recommending that the agency’s board approve a loan of up to $4 million to a partnership between Springfield-based DVR Development and Hartford’s Lexington Partners, which plan a $13.64 million overhaul of the Capitol Hotel at 440 Asylum St. A limited liability company affiliated with DVR, a real estate investment trust, paid $6 million for the nine-story, 68,763-square-foot property in August. Lexington Partners is a prominent development and real estate investment group involved in several of the most ambitious residential projects in and around Hartford. The hotel “is a key piece of Hartford’s hospitality infrastructure, and renovating it to modern standards will add much-needed rooms to support the city’s conventions, events and growing downtown activity,” said Chris Reilly, president and CEO of Lexington Partners. “We’re asking for CRDA’s partnership to bring this property back to a standard that will ensure it can once again serve as a vibrant asset for Hartford.” According to a written brief about the project, Lexington and DVR plan to upgrade the unaffiliated hotel to operate as a Holiday Inn Express & Suites franchise, part of the British multinational IHG Hotels & Resorts. The redevelopment would increase the hotel’s room count from 96 to 105, with extensive overhauls of all rooms, including new bathrooms, carpeting, tiles, furniture, ceilings, doors and artwork to meet IHG standards. Sixteen existing rooms would be converted to suites. The hotel’s breakfast room, fitness center, business center and meeting rooms would also see significant upgrades. The Capitol Hotel has undergone about $750,000 in improvements in recent years, including a 2015 rebranding as a Red Roof Inn, according to CRDA. It later affiliated with the Ascend Hotel Collection but lost its franchise during the industry downturn caused by the COVID-19 pandemic. The pandemic dealt a heavy blow to the hospitality sector broadly, including in Hartford. Before COVID-19, Hartford’s central business district had eight hotels with more than 1,800 rooms. Today, only six hotels remain, offering roughly 1,100 rooms, according to CRDA. Downtown Hartford lost nearly 700 hotel rooms to residential conversions at the former Red Lion Hotel, Homewood Suites by Hilton and roughly half of the former Hartford Hilton, the CRDA briefing noted. “For the CT Convention Center and the PeoplesBank Arena to remain competitive with venues in nearby cities, the (central business district) must regain these lost rooms to bring the most in-demand events to Hartford,” the staff report said. The project’s $13.64 million budget includes the property’s purchase cost. According to CRDA, the financing package consists of $5.14 million in equity, a $4.5 million acquisition loan from Massachusetts-based Country Bank for Savings, and the proposed $4 million CRDA loan.