The prior owner planned to convert a 37-story hotel towering over St. Paul Street into apartment and long-term stay suites, but a new owner decided to invest $14 million in a renovation and keep it a hotel.
The Tremont Plaza Hotel, which has been called the Tremont Suites Hotel since new owners took over last June, is to be rebranded this month as an Embassy Suites, a Hilton product known for spacious rooms with kitchenettes, cook-to-order breakfasts and complimentary cocktails.
"From our perspective, that little niche area has a good balance of demand," said Matthew Cox, vice president of asset management for the Chartres Lodging Group LLC, a lodging investment and consulting firm based in San Francisco, that bought the Tremont property last June with a New York firm called Garrison Investment Group LP.
Baltimore's new Embassy Suites is in a prime location, near the intersection of St. Paul and East Saratoga streets, to serve Mercy Medical Center and Johns Hopkins Hospital, as well as visitors to the Inner Harbor and Mount Vernon, Cox said.
The hotel's prior owner, William C. Smith & Co. Inc., did not see the same potential to continue using the Tremont as a hotel. In January 2012, Smith & Co. announced that it would convert the property into a mix of rental units and long-term guest suites. Just six months before, the Home2 Suites by Hilton opened a block away, offering similar amenities to the Tremont.
Smith & Co., a Washington, D.C.-based developer, purchased the Tremont property in the early 1980s and transformed it from a combination of apartments and offices into a boutique hotel. But in recent years, there appeared to be more demand from business travelers and people undergoing medical treatment for long-term stays, Smith & Co. management said at the time.
The plan was to offer people a place to stay for a few weeks or a few years in furnished or unfurnished suites, they said. That would have increased the availability of downtown apartments, which continue to be in high demand, and decreased the number of hotel rooms.
Hotels in downtown Baltimore, as in most cities, have struggled in recent years largely because fewer conventions and conferences were being booked during the recession. Nightly rates have fallen, hurting hotels' bottom lines.
In 2012, there were more than 8,100 hotel rooms available in downtown Baltimore, defined by a mile radius from the intersection of Light and Pratt streets, according to the Downtown Partnership of Baltimore.
In March, the partnership reported that downtown's hotel occupancy was 63 percent last year, with an average daily room rate of about $150. Both are higher than the national rates, but lower than pre-recession levels.
But when Chartres and Garrison bought the property, they saw continued opportunity for it as a hotel with updated rooms and common areas.
The decision to rebrand it as an Embassy Suites upset city officials, however. The Baltimore Hotel Corp. said opening an Embassy Suites in the Tremont violated a geographic restriction that prohibited Hilton from opening a "group-oriented" hotel in the city center until January 2017. The Embassy Suites would compete with the city's Baltimore Hilton, the city agency said.
Chartres and the Baltimore Hotel Corp., with the assistance of the Downtown Partnership, eventually resolved the dispute, Cox said. The partnership convinced city officials that out-of-state investment in the Tremont would benefit downtown, he said.
"It will be bringing in its own demand," Cox said of the revamped Tremont, which will be called the Embassy Suites Baltimore Downtown.
The Baltimore Hotel Corp. did not respond to requests for comment on the conflict.
Although most Embassy Suites do not have large meeting spaces, the Tremont is connected to a nearly 150-year-old Masonic Lodge that underwent a $27 million renovation in 2006. It has 45,000 square feet of meeting space spread across 19 ornate rooms.
"That's where the long-term growth is going to be focused on," Cox said of the event building, which faces North Charles Street. Newly named Grand Historic Venue, that "gem" sold Chartres on the property, he said.
The hotel has been holding regular murder mystery events and fashion shows in the Grand Historic Venue and is starting jazz concerts soon, just to get people into the space to see how distinctive it is, he said.
"People just don't realize that it's there," Cox said.
The marketing of the Grand Historic Venue by Smith & Co. was geared toward social uses, such as weddings, said James LoBosco, the hotel's managing director. The hotel is broadening its marketing efforts to corporate events, he said.
"We can work with a lot of different price ranges," LoBosco said. The rooms range in size and amenities — from a board room appropriate for lunch meetings to a grand ballroom, he said.
"To have something this grand and expansive is a departure" for the Embassy Suites brand, he said. Most Embassy Suites hotels have access to space of about 10,000 square feet, he said.
The hotel portion of the property has the flexibility to serve groups, he said. About a quarter of the rooms are not the traditional suites, with separate living and sleeping quarters, but single rooms with separate kitchens, he said. Nightly room rates will range from about $120, for a junior suite, to $1,200, for a presidential suite.
In addition to upgrading guest room kitchens and baths, the renovations include a new restaurant and bar, B'More Bistro and Lounge, and a fitness center.
A Starbucks attached to the lobby will open in a few months, LoBosco said, and an event planning firm is expected to open in one of the hotel's two Charles Street storefronts. The Grand Cafe space, however, remains empty, LoBosco said.
"We're just really excited to have the opportunity to invest in this product," Cox said.
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