Point/Counterpoint: Benefits of the Proposed Hotel Development

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Proposed hotel development with boat launch.

Editor’s note: One of our goals at yourdailylocal.com is to make sure we bring readers the information they need to take part in an informed discussion about the people, events, policies and proposals that affect them most. To that end, we bring you this Point/Counterpoint feature regarding the proposed downtown hotel.

Warren City Manager Nancy Freenock lays out the case for moving forward with the hotel development at the base of Liberty Street. Read the counter by Allegheny Outfitters’ Piper VanOrd here.

By Nancy Freenock, Warren City Manager, with Teena Leary and Vince DeJoy

Property along the Allegheny Riverfront in downtown Warren is the most valuable in the City in terms of attracting investment. That fact was recognized in 2006 when plans were in place to construct a hotel and convention center along the River’s northern bank in the City’s commercial district. Due to the economic downturn in 2008, that project did not come to fruition. The area bounded by Liberty Street to the west, the river to the south, Langdon Street to the east, and the Clark Street Parking Garage to the north has remained unimproved since the City purchased it more than a decade ago.

The Warren County Development Association (WCDA) attempted to purchase the vacated portion of the former Loranger Manufacturing facility. This would have provided the ideal location for a downtown hotel, as was envisioned in 2006. Unfortunately, a reasonable purchase price could not be negotiated. HIY, Inc., a local non-profit managed by Ruzhdi Bakalli, was successful in negotiating the purchase of the property, and, much to its credit, HIY successfully rehabilitated part of the former manufacturing site. That investment alone, however, is not sufficient to capture the development potential that exists in the riverfront area.

Last Fall, Mr. Bakalli met with Mayor Maurice Cashman, Jim Decker, President of WCDA, and me to discuss converting the remaining space in his building into a boutique hotel. We all agreed that was a fine idea. However, Mr. Bakalli indicated that he would not undertake that project until the proposed hotel project which the City had been working on for more than three years was off the table. Both the boutique hotel and the franchise can co-exist as they will attract differing clientele. It will take Council action to determine the fate of the hotel project. As your City Manager, I lack the authority to make such decisions.

The City’s 2017 Downtown Strategic Plan emphasizes the need for a downtown hotel. A hotel feasibility study was also completed in 2017 and confirmed that a downtown hotel would be a viable venture. From what could be gleaned, both business travelers and tourists prefer the Hampton Inn or Jamestown hotels to those located in the west end of Warren.

Representatives of the City met with the Scotts, of Scott Enterprises in Erie; attempted to meet with the Shaler Group in State College; with the developer of an office park in Clarion, with Richard Huff who was involved in the 2006 hotel venture in Warren, and with the Patels who also develop hotel projects and had an early interest in a hotel project; all to no avail.

We were able to arrange a meeting in St. Mary’s with Todd Hanes, principal of Hanes Hotel Development, LLC. Mr. Hanes and his investor group determined that the Warren market is viable, and he has been working with the City to develop a riverfront parcel that will accommodate a 59-room hotel. It has taken a great deal of time and effort to develop this project.

For the hotel to be successful, it must be in an attractive, easily accessible location. It is also ideal for guests to be able to walk to restaurants, bars, and shopping. Sites other than Breeze Point Landing were considered and were ultimately rejected for various reasons. Among those sites were: Point Park (flooding); the former Nickels and Dimes site (too small); Crescent Park (deed restrictions which prohibit development), the former Home Street and East Street School properties (not in downtown), and, the owner of the eastern portion of the Loranger building is not interested in selling; we know this because both the City and Mr. Bakalli made inquiries.

The map that accompanies this article is a conceptual rendering and is not a final plan. The plan, as it is currently configured includes the following elements and financing sources:
A total of $5.5 million in Redevelopment Assistance Capital Project (RACP) Funds has been awarded to the City by the Commonwealth; these funds must be matched in the same amount. The City lacks the funds to meet the match requirement; however, the City may take advantage of equity investments in associated projects thereby meeting the match requirement.

The City sub-granted $1.5 million to Pennsylvania Senior Housing Associates, L.P. Those funds will be used for demolition of the buildings located at 235-237 Pennsylvania Avenue West, site preparation, and construction of an entryway on the north side of the Clark Street Parking Garage. The total project costs for the senior living complex are projected to be $13,446,702 and the developer has agreed to allow the City to use some of the equity in its building to match a portion of RACP funds which will be used to improve part of the parking lots on the south side of the Garage.

The City proposes a sub-grant in the amount of $2.5 million in RACP funds to Hanes Hotel Development, LLC. Those funds will augment Hanes’ $7 million investment. Hanes Hotel Development has agreed to allow the City to use some of the project equity to match $1 million in RACP funds which will be utilized to alter ingress and egress to the Landings at Breeze Point Circle and to make other necessary roadway alterations in the area.

Under the above sub-grant agreements, the City will not make a cash contribution to either the hotel or the senior living project. The argument is often made that the City should not utilize taxpayer dollars (grant funds) for some projects. However, it must be emphasized that grant funds are dispersed across the state and when the City utilizes grant funding, some of our residents’ tax dollars are being returned to and invested in our community rather than another locale.

Both the parking and roadway improvements proposed should aid with the parking and traffic congestion that is often experienced on Clark Street during the summer months.
Pedestrians will continue to enjoy the Allegheny Riverfront via the walking trail at Breeze Point Landing.

In 2019, City Council approved an expansion of the existing Local Economic Revitalization Tax Abatement (LERTA) program to provide a 5-year real estate tax abatement for all new construction activities within the City of Warren. This program serves as an incentive for new business development.

In addition, the City applied for $1 million in funding from the Pennsylvania Fish and Boat Commission to construct a boat launch. The launch would be available to the public at no charge. This grant will also cover the cost of improvements to support the launch.

The City proposes relocation of the public restrooms from Breeze Point Landing to the park at the opposite end of Clark Street as well as the construction of a pump track on that lot, provided that it would not unduly hamper the operation of Allegheny Outfitters (AO). If the funding is awarded from Federal funds, the match for these projects would be from remaining RACP funds and a grant application would be submitted to the PA Department of Conservation and Natural Resources.

City staff also believes that there may be sufficient funds to pave the trail behind the HIY building, pending owner approval. This paved trail would aid AO in its operations and would connect to an existing City trail system to further enhance the pedestrian riverfront experience.

To make the foregoing a reality will require Council action. Prior to Council action, I have always maintained that public input should be sought. Given the current pandemic, a public meeting may not be feasible; however, the City will provide a means for public comment.

The City understands that ways to accommodate the businesses in the HIY building must be found. Preliminary discussions were held more than eighteen months ago. At that time, AO indicated that it could fill a hotel but was not interested in having one located proximate to its operation.

Further discussions will be held if Council approves the hotel project. Thus far, the City has spent no money on final engineering studies as the project has not been finally approved by Council, so discussions and further planning would be futile. Accommodations on both sides will be necessary as we plan for the future of the Warren Riverfront.

The loss of the green space along the riverfront is lamentable. However, it should be noted that Crescent Park, with walking trails and an arboretum, is a short distance away. The City taxpayers support 20 active and passive parks. Losing one so that tourists will choose to stay in Warren and not travel to Bradford or Jamestown is one way to promote local business. Other businesses will not come to Warren unless there is a customer base to support them. The declining population of the County, alone, is not sufficient to draw new businesses into the City’s commercial core.

AO posits that it puts 15,000 non-local tourists on the river each season. According to a recent article, quoting Bradford District Ranger Rich Hatfield, the Trails at Jakes Rocks “is gaining a national reputation as a premier mountain bike destination . . . and will house close to 20,000 visitors by year’s end.” Why not entice some of those 35,000 visitors to spend time and money in Warren? That trade is currently lost to Jamestown and Bradford.

It must be understood that the City is limited in what it can do to generate revenue and Council owes a fiduciary duty to all taxpayers in the City to optimize the use of all City-owned property. Developing attractive, paved parking areas will benefit those businesses on Clark Street. It will organize parking and may result in additional spaces. If the number of spaces decreases, the parking garage is a short distance from Clark Street and offers free parking on nights and weekends.

Increased tax rates should not be relied upon to meet ever-increasing operational costs. Encouraging new development, which in turn generates additional tax revenues, is paramount to maintaining a vibrant community. By working together to further revitalize the downtown, the area will be attractive to tourists who will extend their stays, and to those wishing to remain in or relocate to, our corner of Pennsylvania.

As your City Manager, I am asking that you review materials that will be made available and keep an open mind. While residents of surrounding municipalities have opinions on this subject, it is City taxpayers that will be most affected. If new development in the City is discouraged, we will lose revenues, whether from real estate taxes that could have been generated or from Earned Income Taxes that could have been collected, not just from the hotel but from other new businesses that could have flourished due to the existence of the hotel.

The City, as noted above, supports a number of parks. It also provides 24/7 Police, Fire and Emergency Medical Services. EMS services are currently being provided to the surrounding municipalities with no remuneration beyond what a third-party insurer provides. Those collections are not sufficient to cover the Township’s pro-rata cost of operating the department. If not from new development, where then will the additional revenues come from as operational costs continue to rise?

And remember, sometime in the not-too-distant future, rehabilitation of Breeze Point Landing will be needed, Given the cost of concrete, and the amount in place at Breeze Point, I must ask where will the funds come from for rehab of this space?

Have thoughts on the proposed downtown hotel? Send them as a Letter to the Editor to [email protected].

2 COMMENTS

  1. A hotel and convention center have been talked about since the 1960s, in fact my Art class in 1966 drew proposed hotel and convention center designs. Didn’t happen then, and I don’t see it happening now. No one is going to come to Warren for a convention, and their is not enough traffic to support another hotel.

  2. It sounds a lot like, “build it and they will come.” Have you seen the shape of the downtown area that you are attracting people too? It’s not very inviting.

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