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Full of life: The Fort Shelby Hotel, pictured in 1958, was once a popular destination before it was closed in the 1970s.Historic Fort Shelby may get makeover
$76 million face-lift planned for vacant hotel
Fort Shelby Hotel is expected to reopen in fall 2007 and include 204 hotel rooms, a convention center and 63 apartments.
Vacant: Plans are in the final stages to restore the hotel on West Lafayette.; Fort Shelby Hotel is expected to reopen in fall 2007 and include 204 hotel rooms, a convention center and 63 apartments.
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DETROIT -- The long-vacant Pick-Fort Shelby Hotel, a recent symbol of the city's economic downturn, soon could see new life.
After three years of planning, developers expect to start rebuilding the hotel in January and reopen in fall 2007, said Rich Curto, principal of RSC & Associates LLC, a real estate investment and development firm in Chicago. The company intends to finalize the deal by year's end.
"We plan to be a strong competitor in downtown Detroit," he said.
The hotel at 525 W. Lafayette, built in 1918 in the city's central business district, was once a popular destination before it was shuttered in the 1970s.
The $76 million project's development team, which includes some local investors, said the future Fort Shelby Hotel and Conference Center will set itself apart from rising competition. It will include:
• A 204-room hotel.
• About 30,000 square feet of convention space -- enough to accommodate groups up to 200 people.
• 63 apartments.
Including the Fort Shelby project, more than 1,800 hotel rooms are slated to be added to Detroit's downtown hotel market in the next three years. That's on top of 2,500 hotel rooms at new or renovated facilities like the Hilton Garden Inn, Courtyard by Marriott and Detroit Marriott Renaissance Center.
Detroit's three casinos also plan to add a combined 1,200 hotel rooms, while developers are working on a deal to convert the vacant Book-Cadillac Hotel into a 400-room Westin Hotel.
"The hotel market in Detroit and the region is starting to grow after a three-year slump, but anytime you expand a certain market the demand must grow," said Chuck Skelton, president of Hospitality Advisors Inc., a hotel consulting firm in Ann Arbor. "That will be the key to making those new hotels work, along with the residential component."
Skelton said the Fort Shelby and Book-Cadillac projects can rely on added business from residential apartments or condominiums.
"The hotel can generate revenues by providing their homeowners with services and dining facilities," he said. "The casino hotels will likely create demand from groups coming from midwestern cities like Cleveland, Cincinnati, Chicago and Indianapolis."
At the end of June, downtown Detroit's average hotel occupancy stood at 60 percent, up from 57 percent in 1999, Skelton said. An average occupancy rate of around 50 percent is considered the mark at which most hotels start generating profits, experts say.
"We had a few down years, but things are rebounding with added stadiums, (new) businesses like Compuware Corp. and the special events" like the upcoming Super Bowl in February, Skelton added.
The Fort Shelby plans to operate as a Doubletree Guest Suites hotel, a brand offered by Hilton Hotels Corp.
"It will be interesting to see the future product and what we'll have to compete against," said Mark Papazian, co-owner of the 198-room Hilton Garden Inn in Detroit's Harmonie Park, a direct competitor to the Fort Shelby. "We've been doing well, but we've marketed ourselves very aggressively."
Curto's development firm has renovated or built dozens of condos in Grand Rapids, Chicago, Milwaukee and Florida. He's working locally with Detroit developer Emmett Moten, former director of Detroit's Department of Community and Economic Development under the late Mayor Coleman Young, as well as Eugene M. Curtis and Associates, an income property brokerage firm in Birmingham.
"We plan to sell the apartments as condos in five years," Curto said.
Curto said the hotel will be include high-end features such as a concierge to service guests and apartment residents.
"We will have the apartments on floors 11 and up," he said. "The views from the top floors offer great vistas of the Ambassador Bridge, downtown Detroit and Canada."
You can reach R.J. King at (313) 222-2504 or rjking@detnews.com.
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