The announced plans to close the Goodwin Hotel by year’s end signals trouble for Hartford’s seven-year, $1 billion revitalization effort.
An offer by the hotel’s owner, Northland Investment Corp., to lease the property for $1 a year to an employees union hasn’t been accepted. And it highlights the compromised value of the landmark building as a stand-alone property.
Chase Enterprises, a former suitor for the property, which Northland bought in 2005, would be willing to take another look — but only as a package deal with the adjoining office tower, said Cheryl Chase, general counsel of Chase Enterprises.
“I think it is a very tough-stand alone; it would have to be part of a bigger project,” Chase said. “You can’t ask people to keep something going and lose millions of dollars a year. That’s not viable.”
Hartford Mayor Eddie Perez said that other 2005 suitors probably would not be interested either in the hotel without the tower. He noted that Northland has expressed a desire to jettison the hotel by itself.
Northland acquired the hotel in a package deal from the state Pension Fund for $41 million. The agreement provided the Boston-based development company with the 124-room, five-story Goodwin Hotel and the 30-story Goodwin office tower adjoined by five-story atrium and an eight-level parking garage.
The closing of the 19th century terra cotta landmark will represent another blow to Hartford’s multiyear redevelopment efforts. Other private development projects in the city also are stalled, including Plaza Mayor on Park Street and Colt Gateway.
Empty Spaces
Jeffrey Livingston, managing director for CB Richard Ellis in Hartford, said the city would be worse off without one of its signature hotels. “I don’t know if it’ll have a pronounced impact, but in general, it isn’t a good indicator for downtown,” Livingston said. “I do believe there will be interested parties, but it all depends on its business prospects moving forward. Northland is very smart, and if they feel it’s not profitable, there’s probably a reason for that.”
Northland cited “crippling operating losses and a sharp downturn in the hospitality industry,” as the reasons for its decision to close the hotel’s doors by the end of the year.
The development company also purchased the downtown YMCA property overlooking Bushnell Park on Jewell Street in 2005, promising to spend $117 million to build 200 upscale condominiums and 100 apartments and a white-table cloth restaurant at street level. That building remains vacant.
So does most of Northland’s retail street level space below Hartford 21, the 145-room apartment tower it completed two years ago.
According to Northland spokesperson Chuck Coursey, not closing the hotel would jeopardize the company’s “commitment to Hartford’s revitalization.” Coursey also acknowledged in a statement that the company had been bleeding $6 million in red ink on the hotel’s operations since it took ownership three years ago.
Surprise Offer
Northland’s announcement that it would be willing to lease the Goodwin to the hotel’s workers’ union — Unite Here Local 217 — for $1 annually surprised many.
“The fact that they are offering the hotel for a $1 annual lease tells you something,” Chase said. “It’s a pretty generous offer if they could make it work.”
“It’s an unfortunate perfect storm of the economy, with the credit crunch, loss of jobs, tourism down, and room rates down,” she added.
Perez, who was notified about Northland’s plans about a week ago, said that the city is working on finding potential hotel operators.
“I was disappointed because I wished we had some more time,” Perez said, adding that the city has reached out to two potential hotel operators. He declined to identify the parties.
“We’ll certainly look at the list of [2005]bidders and reach out to them,” Perez said. “Along with the union [Unite Here] and Northland, we’re all reaching out and trying to find a suitable party.”
Perez expressed concern for the Goodwin Hotel’s employees and their families. “We would like to figure out which direction we’re headed in within the next week because there is not a lot of time,” he said. “Northland is very motivated to resolve this situation, as we are.”
Northland spokesman Coursey said the company would not have any further comment beyond its written statement.
In addition to the Goodwin complex and Hartford 21, Northland also owns CityPlace II, 42 Trumbull Street and the Metro Center.
