New Hotel Group To Make Its ‘Marx’ In Syracuse

SYRACUSE, NY— Marc Shapiro, a 20-year industry veteran has created his own hotel company, which by early 2003 will have its first property securely positioned as the launching pad for what may well be a new hotel brand. Shapiro, who served in executive positions at Omni and Loews Hotels decided last year to make the move. This year, that vision is reality and Marx Hotels Group LLC is in play. Speaking from his Manhattan headquarters, Shapiro, who leads the private company as president, told HOTEL BUSINESS® his company is investing $22.9 million to acquire and renovate the fabled round University Tower Hotel here to create the 282-room Marx Hotel & Conference Center by year’s end, and debut MHG as an industry player. “We’re looking for properties in the 150- to 300-room range, that have lived through their first life and are prime candidates for repositioning both from product and operational points of view,” said Shapiro. MHG looked at 55 candidate cities and a half-dozen hotels before picking the Syracuse property. “The overall objective was to launch a company dedicated to secondary markets,” said Shapiro, noting the northern New York city is a prime example of a “very strong” secondary market that has been forced over the past 20 years to diversify all of its economic factors to keep its economy moving. “It’s also in our ‘backyard’ and easy to get to— an important factor for the first hotel,” he said. Built in 1968, the hotel had been a Holiday Inn and a Best Western, but is now deflagged and currently low on the priority list for elective stays in Syracuse, according to Shapiro. MHG will reposition guestrooms as boutique-quality accommodations and expand meeting space into a 12,500-square-foot conference center located on two levels (Penthouse and Concourse), with the 3,500-square-foot, panoramic-view Penthouse level catering to executive meetings and private dinners. “It was not nearly as difficult to get this hotel project financed as one would typically believe in this market. It’s very reasonable acquisition cost is allowing us to make improvements to the hotel, so literally 62 cents of every dollar on the project is being spent to reposition it from a product point,” said Shapiro. He said the property represents $3.6 million of the project cost, or just under $13,000 per key ($81,000 per key all in). Other additions planned include entertainment, social catering and a 140-seat restaurant in a 2.5-story space that previously served as the hotels pool. A 45-seat library lounge will provide a “living room” atmosphere. There’s also a five-story 300-car parking garage whose renovation is part of the redevelopment plan. “We wanted to take to the secondary markets a product that was distinctive rather than cookie-cutter and create a dominant hotel in the marketplace through product,” said Shapiro. MHG also will manage the property. The two levels of function space will be operated as a single unit, he added, and the center will feature state-of-the-art technology, with broadband connectivity throughout the entire hotel, including guestrooms. MHG partnered with the city to take advantage of Empire Zone benefits, such as property tax credits and rebate programs, as well as wage tax and utility usage benefits, which have helped the project’s economics. Syracuse also is now a national empowerment zone, and the hotel qualifies on a federal level for benefits, ultimately for permanent financing that is tax-free bond financing. MHG is reconfiguring the hotel’s entrance to face a park, where the city will make improvements in exchange for the hotel maintaining the park on an ongoing nonstructural basis. The city also will improve the hotel’s sidewalks and driveways, and on/off ramps of the nearby highway. Shapiro’s vision for his brand has been buoyed by first-quarter figures thus far, noting hotels in Syracuse were running occupancies in January in the mid-70s, according to a survey by The Pinnacle Group out of