The Farragut Hotel Building to Become a Hyatt Place Hotel

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

It’s been a long and tortured journey for the former Farragut Hotel. Under utilized, forlorn and nearly abandoned for decades, its become a point of discussion in recent years. One ambitious plan to return it to a hotel was announced only to falter and fail. Rick Dover purchased the building and toyed with the idea of making it a combination hotel and very high-end apartment building. It was clear from early on that he wanted it to be a hotel, but he wasn’t sure that was viable.

A few months ago, Joe Sullivan wrote a piece in the Mercury saying that intentions had reversed and it would be a hotel. The search was on for several components which would make the project work, including dedicated parking, a tax deferment and a low-interest HUD loan. Each of these have subsequently lined up with a twenty-five year PILOT from the city and county, guaranteed parking in the state street garage (for which he will pay market rates) and, with the help of the city, the HUD loan for $2.9 million was secured.

Hyatt Place

Press Conference to Announce Hyatt Place Branding of the Farragut (Photo courtesy Cohen Communications Group)

Construction seemed to have begun in earnest over the winter and a press conference yesterday made the kind of announcement needed for the project to take the next step: Hyatt will brand the hotel as one of their Hyatt Place hotels, returning the Hyatt brand to Knoxville. Operations will be handled by White Lodging. Congressman Duncan, Mayors Rogero and Burchett and others were on hand to laud the emergent hotel.

The new hotel in the nine-story building will feature 165 rooms. Originally built in 1917 with 190 rooms, the rooms will be larger this time around. Also included will be a market open twenty-four hours a day serving freshly prepared foods. (The previous statement of a 24 hour restaurant was my error. There will be no formal restaurant in the hotel.) A coffee-to-cocktails bar serving “specialty coffees and premium beers,” as well as wine and cocktails is a part of the project, as well as a twenty-four hour gym and 2700 square feet of “flexible, high-tech meeting/function space.”

No mention was made in the press release of some of the grander ideas floated in the past, such as an entertainment venue in the basement, multiple restaurants, or a return of the ballroom that older citizens in the city remember. There will be (this is a correction to an error in my earlier version of this article) a rooftop presence of some sort to be determined. Still, Hyatt Place represents a very nice brand, with rates at Nashville’s downtown Hyatt Place running upwards from the mid $300 range to the upper $400 range per night. Knoxville’s rates could obviously be less than those charged in Nashville.

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

Farragut Hotel, 530 S. Gay Street, Knoxville, February 2014

To have a historic hotel downtown of this size would certainly be significant for Knoxville and it’s been a missing piece to our re-development. It’s hard to name significant cities without a large historic hotel and while we have had the Oliver, its size limits its impact. With the prospect of 60 to 80 jobs – and around 200 construction jobs during that phase – the hotel will also be a significant employer.

Plans call for it to open early in 2017, which will be the 100th anniversary of the building of the original hotel.

 

Comments

  1. Mary Linda Schwarzbart says:

    What will happen to my favorite, The French Market. I have not read, or have missed, how this affect their Gay Street site.

    • KnoxvilleUrbanGuy says:

      They have a long-term lease.

      • Mary Linda Schwarzbart says:

        great – this is a favorite of mine.

      • Maria McGuire says:

        Hi from overseas.. As a devotee to the French Market, I am perplexed that the vision for this hotel doesn’t mention the other tenant in the building. Rather, from the French Market’s FB page and their article on Wate.com, they are VERY concerned about the effects of the construction on their business. From their site, they are on the unfortunate end of this new development, and frankly, they are a draw to our city and run an excellent business. They do have a long-term lease, but if the landlord really wants a Starbucks in place, it looks like they are already taking negligent strides toward making that happen.

  2. Hey KnoxvilleUrbanguy et al, what do you think of eventually getting another huge hotel Downtown that would lead to a new skyscraper? For instance, such as in bigger cities like Pittsburgh. There are several very nice hotels in Downtown Pitt in renovated historic buildings (that in fact were hotels for years and years prior) but also some massive ‘scrapers that have lots of rooms and high-end restaurants/shops (and, yes, a Starbucks or somesuch) in the lobby. My thoughts are that Knoxville could use one or two modern scrapers (which use classic design) just to add to the cache of a growing, hip city. Is such a project in the future?

    • KnoxvilleUrbanGuy says:

      Nothing of the skyscraper scale that I know of. I am surprised that we don’t have a full-service Starbucks downtown already. And, of course, we are getting this major hotel project and likely another, soon.

      • I am really happy that we have local coffee shops such as Flow, Old City Java, K-Brew, etc. I hope it stays that way and we don’t have an flux of the McDonalds of the coffee world such as Starbucks!

        • That should be infusion, not Flux. Or maybe invasion would be a better word!

          • I agree on nixing Starbux. The question is whether a big hotel chain would help a local coffee brewer (or local brewery for that matter) locate in its lobby. Hopefully there would be a fair competition/bidding process for the winner(s) but we can always dream, can’t we? My cynical view is there are corp-to-corp sweetheart deals undermining the process.

          • KnoxvilleUrbanGuy says:

            Corporations collude? Wash your mouth! 🙂

  3. Where are the clients of the soon-to-be-opened Maple Hall Bowling Lanes on Gay Street going to park their cars? It seems that Knoxville will have to build yet another parking garage.

    • KnoxvilleUrbanGuy says:

      Knoxville is wisely not requiring new businesses to supply parking. I hope we are finished with garages.

    • I am with Urban Guy on this one. Knoxville has far more downtown parking than it needs. It seems that people don’t want to walk more than a few feet to their destination. Get out of the car, walk, live longer.

      • Amen. I live in the south eastern glass building and watch people circle for 20 minutes trying to find parking in the Balter lot, in our private lot or on the street. Despite the fact that the city lot is only a block away and is usually free around the time i am home and watching.

  4. I love how Mr. Dover and his team are reassuring Knoxvillians that this will be good for their city. His team could use a publicist. Gaping holes exist in this announcement and in the press release, so vast it hurts to watch. The reality of this holds that when Mr. Dover went to Hyatt for funding, he screwed a huge number of Knoxvillians out of jobs. People had already begun projects on that building and were counting on it for future advertising. Local people. Not only did he take those jobs (and any information attained from them) away, that county actually allowed him to secure an HUD loan to do so. An HUD loan is completely inappropriate for this type of venture. It can have good implications including insurance in the event of bankruptcy and foreclosure, but the fact that a multi-million dollar one was obtained to fund this project limits the number of FHA loans that can be given in that county. Are you a UT graduate who finally has the money to get a loft downtown? Too bad. Are you wanting to finally open up the restaurant you have been saving for on Gay Street? Not happening. If you think this is good for Knoxville, think again. The only money flow from this project will be one that is leaving the state. Hyatt headquarters are in Chicago and the construction companies they use will be corporations. I have invested a large amount of money in Knoxville renovations and securing the appropriate people to do so. I am appalled at someone who considers himself a part of my hometown to take advantage of it so easily.

    • KnoxvilleUrbanGuy says:

      I approved this comment, because I only rarely deny one, but I have to say it’s hard to follow, Jane. Because he is re-developing a hotel on Gay Street people won’t be able to buy a condo or open a restaurant on Gay Street? As for the money flow, despite the affiliation, Mr. Dover, who is local and has been his entire life, will retain ownership of the building and, I presume most of the profits. So, we get a locally owned, nationally branded hotel on Gay Street in place of an empty building. Feel free to elaborate, if you like, but keep the tone civil.

      • I think the idea of all national chains completely screwing local businesses out of a chance to operate, particularly in rapidly growing cities such as Knoxville, is highly exaggerated. This showed incredibly so when Urban Outfitters opened downtown. People were at odds over what would happen, whether the local stores would all go out of business, or whether the fact that a destination store such as UO opening would increase foot traffic, and increase business for the local stores, and bring in a younger crowd. Obviously, the latter happened. I’m 22 years old now, and since it opened I’ve discovered even more of what downtown has to offer, and see a lot more people around my age there since I used to go downtown with my parents when I was younger, and I shop and/or eat downtown at least once a week. I realize the discussion is about nationally branded hotels rather than stores, but the argument remains the same. While it’s never a good idea for a city to be completely taken over by chains, they are necessary to bring people to an area to discover the local shops, and personally I think Downtown Knoxville and the immediately surrounding areas are short on them. As Downtown Knoxville expands I hope to see us get a department store such as a Macy’s or if we’re lucky a Nordstrom, more modern furniture stores such as Crate and Barrel, and various other stores such as hardware and electronics. So while some money may be flowing to Chicago due to the branding, even if it wasn’t a locally owned hotel, significant money would still very much be spent locally. This is probably the longest comment I’ve ever written but I feel very passionately about the subject.

    • Bill Lyons says:

      I have to admit that I am just a bit perplexed..First, The HUD loan is a 108 loan that does not in any way affect any other loans in Knoxville. It is for a specific purpose – community development projects such as this one. It is totally unrelated to FHA. In fact this loan is tied to local job creation so the entire job narrative just does not apply. Second, there were no other “projects” for this building. The previous owners tried for years to develop it – initially for apartment and then for a hotel. All efforts failed despite full city participation. As Urban guy points out, Hyatt is just the flag. They are not at all involved in construction. Another group operates the hotel and Mr. Dover remains the owner and the developer. He did not go to Hyatt for funding. Thanks

  5. Suzanne says:

    Will the hotel have 24 hour Valet parking?

  6. Larry Lewis says:

    Hadn’t Mr. Dover floated senior housing for (part of?) the Farragut, after he purchased it? I’d had my doubts about the viability of that option.

    • KnoxvilleUrbanGuy says:

      Not really senior housing – he’s doing that at Knoxville High School – but a combination of apartments and hotel rooms, which he thought would morph into all apartments over time. He pictured older retirees being the primary audience. I think this is much better for that building.

  7. Mike Cohen here, and I work for Rick Dover. We are leasing 165 spaces in the State Street garage, which can still be expanded by two more levels. We pay the same rate as downtown residents. We plan some exciting stuff–the rooftop space is unbelievable. Clear view to the mountains. We do not plan on doing a restaurant. Food service available, breakfast obviously…but there are so many great restaurants downtown that we opted not to do a full restaurant. Events can use caterers. There will be a bar…at least one. Shout to to Faris Eid and Design Innovations, the local architect on the project. Also, thanks to the Central Business Improvement District (CBID) which played a critical role in moving this project forward.

  8. It’s about time he announced this! Considering he first said he would about 8 months ago. But this is great news! And helping pave the way for Knoxville to become a tourist city.

    • Just to clarify, as you point out, Mr. Dover has been very public about his intention to develop the Farragut Hotel for a number of months. The announcement Monday was to formally reveal the Hotel Flag – Hyatt Place and operator. We at the City just recently got the final piece in place on the financing package – the HUD 108 loan. The formal announcement and final commitment of Hyatt was dependent on a complete financing package along with tidying up the details on parking. For the latter we needed to allow for Valet parking. Putting that in place took a good deal of time as well. BTW having a valet parking ordinance is something we have needed for a while. It has become a necessity in any city with a wide range of dining in spaces such as Downtown and the Old CIty where surface parking is often not proximate to the restaurant. This is a game changing project for downtown and puts our largest long largely vacant property in productive use. The fact that the original use as an historic hotel is a great bonus.

      • Art Wagner says:

        Has this instigated any new discussions on expanding the State Garage again, taking advantage of the potential for two more levels?

        • KnoxvilleUrbanGuy says:

          I’ve heard talk of it, though only marginally related to this particular project. The next phase of Marble Alley will likely put additional pressure on that garage and that may be the impetus to build additional levels. As Becky said yesterday, the hotel will only take about 16% of the current structure and that will be cut nearly in half if they open up the additional spaces she mentioned.

  9. Hmmm. Hotel parking in the State Street garage, huh? That’s an important public and inexpensive parking option for people going to other places downtown: movies, events at he Tennessee Theater, the ETHC, Market Square, etc. A recent try at parking in the garage near the Hilton/UT conference center showed that garage was dominated by hotel spaces, and it was difficult and expensive to park $10 for about 3 hours).

    So, could you give us more information? Of the (how many?) total parking spaces in the State Street garage, how many will be given over to the hotel? What will happen to the “market rates” for parking, and will free after-6 parking disappear?

    All these “press release” stories about downtown development are good, but they rarely mention the negative impacts to the public as the largesse is showered upon the developers. Could you give us more information please?

    • Becky Hancock says:

      The hotel gets one space per room, so, 165. There are currently over 1000 spaces in state street garage. The city has already prepared to add to the total by activating about 50 unused spaces on the central street side. Also, when an additional level was added a few years ago, infrastructure was included to more easily add two more levels.
      The parking spaces have been discussed in the media and was also brought up at city council. Yes, downtown is already busy and parking can be right on certain nights. Personally, it has the potential to have a negative impact on the Tennessee Theatre (I’m the ED there) more than most, but I’m convinced the trade off of having a beautifully restored hotel in a building that’s been mostly vacant for decades is worth it. The city (and its residents/visitors) have to be prepared for any “downsides” that come with growth.

      KUB, Rick did in fact mention a rooftop space yesterday during the press conference, so I’m pretty sure that’s happening. I didn’t hear him mention. 24/7 market-restaurant. In other conversations, he’s said he wants hotel guests to enjoy restaurants throughout downtown, and that the lobby will feature a bar only. Where/when did you hear about the 24/7 thing?
      I’m very excited about this project and having this intersection be fully developed and active on all four corners again.

      • KnoxvilleUrbanGuy says:

        Unfortunately I was unable to attend the press conference. I’m glad to hear the rooftop was mentioned there – it was not mentioned in the press release, which seems odd. The 24/7 restaurant was listed, though it’s possible I could have mis-interpreted it. I hate I wasn’t there to get clarification. Here’s what it said, “24/7 Gallery Menu and Market serving freshly prepared meals anytime day or night.” I assumed that was a restaurant, but re-reading it, perhaps not?

      • Thanks for the info, which clarifies matters and reassures me. Had not seen this level of detail before, so perhaps I am not tuned in enough. Also, as a long-time resident of a downtown neighborhood whose former partner once worked at the Farragut many years ago, I wholeheartedly support the Farragut’s restoration and development and other downtown growth and change.

        The tone of your message is a bit condescending. You seem a bit irritated at having to answer the question by pointing out that parking issues had been covered in the media. Also, there was no need to point out how we “citizens” must be patient with change and growth. You seem to assume that anyone who asks a question must be opposed to such changes, and you are wrong about that. I simply wanted information about where I park 99% of the time when I go downtown. Perhaps if you just provided info and left out the slight digs at the questioner, you would make better impressions son people.

    • KnoxvilleUrbanGuy says:

      I think Becky answered most of what you asked, but one other word about the parking garage you parked in across from the conference center. It was dominated by hotel parking because it is a hotel parking garage. The Locust Street Garage across the street from that charges $1 per hour except for special events and I’m never aware of hotel guests parking that. It’s the garage I use everyday.

      • Thanks. Had a course at UT and was running late and picked the wrong garage. Will know better next time.

    • Art Wagner says:

      The garage immediately adjacent to the Hilton is a privately owned garage managed under contract by the Hilton. So, it is natural that a lot of the spaces are devoted to hotel guests. However, a half block from there is the city-owned Locust Street Garage that has the city garage rate and is free on nights and weekends.

      Unless you are a stranger to Knoxville and have not availed yourself of the widely available public information about how and where to park downtown, I have trouble having sympathy for Knoxvillians who pay private lot rates.

      • Art Wagner says:

        I didn’t type fast enough I guess. My reply duplicated the info UG offered. Sorry.

      • The garage next to the Hilton is owned and operated by Premier parking; the hotel has no ownership of it whatsoever and pays premium rates in order to use it, as does the contracted valet company. As a result, guest parking fees are exorbitant and even employees don’t receive discounted parking.

        • I failed to add that, because it is a public garage, spaces for hotel guests are not guaranteed in the event of a large happening downtown. Guests have to be told that if they are to move their vehicles during, say, a football game, they likely won’t find a spot upon returning. I can’t imagine the same kind of arrangement being brokered for the new Hyatt, though.

      • Well, good you are not offering sympathy. I did not ask for any.

        • Art Wagner says:

          I apologize if my reply was too brusque, but your initial comment sounded just like the same old mud that naysayers have been trying to heave at downtown for the last 10+years. The mud included statements like: “there’s no place to park,” “you’ll get mugged if you park in a garage,” and “the parking is too expensive.” All false. Apparently, some of this came from suburban business interests who saw downtown as a threat to their strip malls and plowed under cow pastures. As a result, garages have been built and expanded downtown, and the City has gone to great expense and effort to publicize how and where to find downtown parking, easily, conveniently, and cheaply.

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