Downtown Baltimore's historic Keyser office building is expected to reopen next summer as a new hotel, five years after the developer that started the conversion entered bankruptcy.
Red Lion Hotels Corp., a company based in Spokane, Wash., with more than 50 hotels, said Tuesday it had purchased the Redwood Street property for $15.7 million, closing on the deal last week.
The new Baltimore property, once slated to become a Hotel Indigo, is the firm's first on the East Coast and the first announced under a new flag — "Hotel RL," an upscale brand the company launched last month in an effort to appeal to travelers with a "millennial mindset."
The firm said it plans to invest more than $50 million in the next 18 months to convert properties to the name.
"The announcement of our first Hotel RL at the Inner Harbor of Baltimore is momentous," said Angela Landgraf, the firm's senior vice president of corporate development, in a news release. "This acquisition is key to launching our investment strategy designed to expand all of our brands across the country."
The 10-story Keyser building, located on the corner of Calvert and Redwood streets, was built in 1905, immediately after the Great Fire, and once housed more than 100 offices, according to its description on the list of the state's historic properties.
In 2004, a firm headed by businesswoman Annie Kim purchased the property for $4 million and embarked on a $24 million conversion, with plans to open as the Hotel Indigo in 2009. (A Hotel Indigo is now scheduled to open next year in Mount Vernon, at the historic YMCA, which was sold to new owners for $6.1 million in July.)
Financial troubles stopped the work on the Keyser when it was about 70 percent complete. The property's holding company, 207 Redwood LLC, filed for bankruptcy in 2010 after a foreclosure auction was scheduled to resolve $14.7 million in mortgage debt.
RL BB LLC, which acquired the note on the $16.3 million construction loan from BB&T in 2010, took ownership this past May.
"The building itself has been fought over by banks and developers over the last several years. It was never a building that people were trying to get rid of," said Kirby Fowler, president of the Downtown Partnership of Baltimore, which advocates for the area. "It was a shame. You could walk past that building over the past several years and see it was on the verge. The prior developer wasn't able to pull it off."
Red Lion, which plans to form a joint venture with Shelbourne Capital for the hotel, said it expects to spend about $3.5 million to complete the renovation. The firm's plans call for a 600-square-foot meeting space, exercise room and business center, as well as an open lobby with a "coffee house setting" that evokes the Pacific Northwest.
Fowler said he welcomes new activity for a building that has lain dormant, especially with other additions to the neighborhood, such as the new Chesapeake Shakespeare Theater, expanded QG department store and nearby apartment projects.
"From a Downtown Partnership perspective we want to continue to see these key blocks filled in and that's our primary goal," he said. "You can see progress finally marching up Calvert Street from the Inner Harbor."