Downtown Dilemma Who will build the next hotel?

An interview with Bob Trezise, president and CEO of LEAP

When it comes to predicting future business, there’s no denying the strength in numbers – especially when they continue to trend in a positive direction.

For the past three years, Lansing’s hotel occupancy rate has outperformed state averages; for the past two years, those same numbers have kept pace with national averages. The idea of building a second downtown hotel could soon become a reality. Interest from potential owners and developers has gained noticeable traction over the past year, in response to the eventual end of the Radisson’s 30-year, non-compete agreement with the city, scheduled to conclude Jan. 31, 2018.

Bob Trezise, president and chief executive officer of the Lansing Economic Area Partnership (LEAP), recently addressed an inquiry from Greater Lansing Business Monthly about what the next steps are in the process and why the city would benefit from a second downtown hotel.

GLBM: At this point, what might the timeline be for the beginning of construction of a downtown hotel, and when might we know the developer?

BT: We are currently in the infancy stages of working with four different groups, all of whom are proposing hotels for downtown as part of their project. We’ll be in an extended period of due diligence as developers put together further work as well. That being said, I think all understand that the time to strike is now, because you never know when the economy will swing the other way. I would hope that we have at least one project with a hotel downtown under construction by next year.

GLBM: How likely is Lansing City Hall to be the site of a new hotel? Would it not be costlier to refurbish and retrofit that building instead of starting fresh at a different site?

BT: We had hoped that a hotel would be part of a presentation on new City Hall ideas; that is a separate process underway. Right now [in late August], we do not know much about potential proposals. I don’t know what’s more or less expensive – from both a developer’s and city taxpayer’s perspective – with regard to what will happen with the current City Hall site. It strikes me personally that the capital city of Michigan, with a site next to our grand state Capitol building, should set big expectations and explore with new imagination this once-in-a-lifetime opportunity, rather than settling. Ultimately, it will come down to a process of experts’ recommendations and public input. If I were a developer, I know that the easiest and least expensive solution would simply be to rehab [City Hall] with apartments. I understand that. But shouldn’t we consider what is best for an exciting, growing, globally competitive city and our future skyline — not just the same old, same old?

GLBM: Are the current occupancy numbers favorable for a new hotel? If so, what indicators show that trend is likely to continue?

BT: The region has built many new hotels over the last couple of years because, like in most areas, the Lansing region is badly underbuilt. Unlike Columbus, Ohio or Madison, Wis., this area is not fulfilling its true potential. While new hotels have come online, occupancy has actually risen. That tells you something important about the new, growing Lansing.

GLBM: How much business would a downtown hotel siphon off from newer, recently built hotels such as those at Eastwood Towne Center?

BT: I don’t believe any. It’s important that our economy matures to a point where we aren’t frightened and trapped by the old Lansing mentality that suggests that we can only have one of each thing and no more. That isn’t how big cities work. Big cities compete and provide many choices to business and talent. We have to reach that point of magic in our market. Eastwood is a really important regional asset that provides our region with much higher-end shopping and dining experiences. And so will Michigan Avenue and the downtowns of Lansing and East Lansing, as well as the Harrison Road/Collins Road corridor area. All boats will rise with a tide of momentum that is historic for the Lansing and tri-county region.

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