"After languishing in the shadow of the recently refurbished Lexington Center and in desperate need of updating, the 30-year-old Hyatt Hotel is changing hands and will undergo an 18-month, $10 million total makeover well in time to accept the throngs anticipated for the Alltech FEI World Equestrian Games.
The Rhode Island-based Procaccianti Group, one of the top ten privately held hotel owner-operators in the United States, has made a non-refundable deposit on the property and anticipates closing on November 30, 2006. The deal will make the Hyatt its 46th property in 17 states.
"The Lexington hospitality market is a lot of 'haves and have nots.' So there's a bit of a dichotomy," said Procaccianti Group Chief Investment Officer Rob Leven in Atlanta. "We think this hotel has — because of its physical condition and some of its ownership difficulties over the last ten years — fallen into the have-not category. Based on its location with the connection to the (Lexington) Center, it should be in the 'have' category. We plan to put it back there."
Hyatt spokesman Jim Abrahamson confirmed the deal, but declined further comment.
Total makeover in the works
"There will be massive physical changes," Leven said of his company's plans for the renovation of the 365-room hotel. Preparations are expected to commence almost immediately after the closing with full-scale renovation underway by May of '07. "There isn't going to be too much that won't be touched It'll be a complete and total redo of all the guest rooms, corridors; it'll be a complete redo of all of the meeting space. There will be some changes and work done to the lobby and bar area — those are being designed as we speak. There is also a whole bunch of mechanical and physical plant issues that need to be addressed — a complete updating of the elevator machinery, which is long overdue (and is now underway). There will be a replacement of all of the fan coil heating and air conditioning units in the guestrooms. The list goes on and on."
The hotel will continue operating while the work is underway, he said. "We always do these things in phases, and we've gotten fairly good at doing this stuff around the business of the hotel. That's not to say that there won't be disruption. It's never ideal, but the finished product is worth it to future guests."
Leven said plans call for Procaccianti to operate the hotel as a franchisee under a license agreement, an arrangement that signals a new direction for Hyatt. "Hyatt has traditionally not been a franchiser of their brand. They really just in the last six months have decided to selectively identify a handful of owners and management companies who they are going to be rolling-out this full-service franchising program with. We are part of this small, select group of approved owners and operators for Hyatt."
Most current employees are expected to remain. Leven said there is also a core group of long-term Hyatt employees who want to remain with that company who "will be moving on" within the chain. The company is actively working to recruit a new general manager.
The Procaccianti Group has owned or developed properties in 16 states valued at more than $4 billion. Those properties include 45 hotels representing a range of brands, which include Westin, Marriott, Hilton, Crowne Plaza, InterContinental and Radisson as well as Holiday Inn, Double Tree, Comfort Inn, Sheraton, Wyndham and Renaissance. The company's expertise, said Leven, has included working hand-in-glove with entities similar to the Lexington Center Corporation. "We have a pretty good track record of coming in and revitalizing the relationship between a headquarter hotel and a convention center. We have positive relationships in the places where we have done it so we expect the exact same thing to happen in Lexington."
With completion expected by spring of 2008, the Hyatt will be in position to offer sparkling new facilities for the Alltech FEI World Equestrian Games in 2010. "With the type of person we're going to bring in, we would like to have as many first-class hotel rooms or renovated hotel rooms as possible," said World Games 2010 Foundation CEO Jack Kelly. "It will be an advantage to us to have more first-class hotel rooms because we know we have a high level of demand for that level of quality."
Perhaps as a positive omen, Procaccianti's Rob Leven was highly complementary of the reception he and his company have encountered in Lexington. "I will say that all of the people we've spoken to — at the city, at the Convention and Visitors Bureau, the folks over at the Convention Center — they couldn't be more accommodating and excited to work with us and do everything they can to help us achieve what we need to achieve. Sometimes we don't walk into such open arms, so I think this should be a very, very positive experience for everybody."
For Downtown Development Authority president and CEO Harold Tate, it already is. "This is a great step in the continuing positive efforts toward the redevelopment of downtown. With the completed renovation of the Lexington Center, the rehabilitation of the Hyatt, the completion of 500s on Main and all the other activities downtown, our downtown will become the 'Gem' of the Bluegrass."