The future site of a 7-story hotel, part of the Hilton Tapestry Collection, in downtown Salem. (Saphara Harrell/Salem Reporter)
A new 7-story hotel is coming to downtown Salem – with a big boost from the city.
Portland-based developer Sturgeon Development Partners is breaking ground on a $43 million project called the Holman Riverfront Park Hotel, part of the Hilton Tapestry Collection franchise, this summer.
The hotel will be located at 195 Commercial Street, formerly the Marion Car Rental and Park built in 1950. It’s expected to open in early 2023.
Salem’s Urban Renewal Agency awarded Sturgeon Development Partners a $749,999 capital improvement grant. Documents show the developer chose the site because of its proximity to the Willamette River and convention center, and because of downtown Salem’s growth.
During its June 28 meeting, the agency approved an exemption for the grant which usually caps at $300,000.
In a letter to Kristin Retherford, Urban Development director, Sturgeon Development Partners said city funds were needed to assist in the financial viability of the development with lumber costs increasing by 50% and steel by 25%.
“The impact of COVID 19 on the hospitality sector has been significant and has made construction financing difficult to procure. City funds will help offset these financing challenges and be more favorable by lenders,” the letter said.
During the June 28 meeting, city councilor Vanessa Nordyke asked why the city would invest in a hotel and what the expectation of recouping the investment was.
Retherford said that property will come onto the tax rolls and that property tax money will go into the urban renewal area to help fund other projects.
When the renewal area sunsets, Retherford said it will be a significant amount of tax revenue for the city’s general fund.
She also said the hotel will create jobs and be a benefit to downtown businesses.
“People end up having to stay down at the freeway and when that happens our downtown businesses lose out. If you’re staying downtown, you’re going to go bar hopping, you’re going to go out to dinner, you’re going to do all those things downtown. If you’re driving or taking a shuttle after a conference out to the freeway, that’s where you’re going to stay,” she told agency members.
Agency members, who are also city council members, unanimously approved the grant.
Nick Fritel of Sturgeon Development Partners presented renderings of the future hotel during the meeting.
He said there will be 129 rooms, about a quarter of which will offer extended stays with kitchenettes.
Fritel said rooms would cost about $185 per night.
Contact reporter Saphara Harrell at 503-549-6250, [email protected].
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