Boutique hotels bring vibrancy to downtowns

Florence hotel developer Grey Raines was talking over the idea of a boutique hotel with a friend and asked where it should be located.
"I said great idea, where are we going? Charleston? Charlotte?" Raines recalled. "He said, "Downtown Florence." I thought he was crazy."
Less than five years later, Raines and his partners are planning an expansion of the Hotel Florence, an Ascend-affiliated, 49-room hotel in a renovated early 20th century building in what once was the city's main downtown shopping, dining and entertainment district.
Hotel Florence 
Hotel Florence, Florence, SC


"We could not have done this project without the cooperation of the city and the leadership of Mayor Stephen Wukela," Raines said.

Wukela said he saw the hotel project as a catalyst for revitalizing the city's downtown core'a catalyst that would bring people to the area after dark.

The city tapped water and sewer funds to make improvements to the downtown infrastructure, much as it does for new developments outside the city's core, Wukela said. Tax increment financing provided funding for landscape and parking improvements. The water and sewer money will be repaid by increased demand for services, Wukela said.

Now, a developer is looking at putting apartments, stores and a restaurant across the street from the hotel.

Other midsize South Carolina cities, including Beaufort and Anderson, have followed a similar path to bring vibrancy back to their downtown areas. In each case, the hotels were developed by local residents looking to re-create the downtowns where they had grown up.

"The stimulus of that one project has taken a street that was nothing but a thoroughfare and turned it into a center of commerce," Beaufort Mayor Billy Keyserling said of his city's boutique hotel, City Lofts.

City Lofts was built without financial incentives from the city. "The only city investment was encouragement," Keyserling said.

Matt McAlhaney, a real estate developer, said he knew there was a void in Beaufort for a downtown boutique hotel. The market for affordable hotel rooms, largely for families coming to watch basic-training graduations at Marine Depot Parris Island, was covered mostly by quality national chains. Downtown has a number of bed-and-breakfast operations that offer luxury but focus on a different type of traveler.

"Our product caters to a sophisticated, well-traveled audience," McAlhaney said.

But the City Lofts was not planned as a boutique hotel. McAlhaney originally planned a condominium/hotel complex.

"I had a number of presales, but it was perfectly horrible timing," he said. "We opened our doors at the bottom of the recession in 2009."

The project has survived the failure of his original lender and subsequent note-holders. Still, he said, the hotel has done well throughout the downturn.

"We are enjoying some very high occupancy rates," he said. "We are looking at expanding. We have room for an additional 12-15 more rooms."

The Hotel Florence also is looking at expanding as is the Bleckley Inn in Anderson.

Bleckley Inn
Bleckley Inn, Anderson, SC

Like the other hotels, the Bleckley was built by a successful businessman in his hometown.

"The idea came after the Budweiser Clydesdales visited the city," inn developer Steve Kay said. The horses were put up in the old livery stable downtown, but the trainers who worked with the horses had to leave town each night during the visit to get to their hotel room.

"We had a nice place for horses to sleep," Kay said. "But not for people."

Kay, an electrical contractor by trade, put together three buildings that he gutted and renovated into hotel rooms. The city was able to provide a grant of $40,000 a year for five years and about $100,000 in infrastructure improvements.

Now, Kay is looking at another nearby property for a second hotel combined with extended stay facilities and retail on the first floor.

The primary customer for the Bleckley Inn is wedding parties, said Kay.

"Midweek, we have a lot of industry representatives, especially those that are foreign-based who like the boutique hotel idea," he said. "But on the weekend, the brides take over."

The Bleckley offers turnkey service for weddings'a place to stay and hold the ceremony and reception.

"The goal is to get more people downtown," he said.

That is exactly what the downtown hotels have done, bringing in restaurants and shops and helping return the city centers to what they once were.

"We chose Anderson because that's where I grew up. My family has been there for several generations," Kay said. "I'm old enough to remember when downtown was where you went to town. I can walk around the square and tell you what every store was."

Anderson Mayor Terence Roberts pointed to Kay's local connections as a major part of his business" success. "Steve grew up here and has roots here. He understands our city and knows the time was right for this type of development."

Wukela said the Hotel Florence initially was met with skepticism after decades of false-starts and developments that promised much, but delivered little.

"When this facility opened, people saw that promise come to fruition," he said.