SalemNews.com, Salem, MA

July 10, 2013

Hotel vote set for next week

BY TOM DALTON
STAFF WRITER

---- — SALEM — Circle next Thursday on your calendar because the City Council has marked down that evening for a vote on a key piece of a $46 million downtown hotel development.

If there is strong opposition to a proposal to sell a half-acre of city land to developer RCG, it was not apparent last night at a sparsely attended City Council public hearing.

Even the City Council had a poor turnout, with only seven of 11 councilors present. As a result, the hearing was continued to July 18, with the promise that a vote will be taken that night.

Mayor Kim Driscoll, who proposed the land sale and wants to see the project get moving, rose from her chair several times to question Council President Jerry Ryan about the date for a vote.

“The developer needs to know whether they can incorporate the (city) property into the development ... and move forward,” she said at one point.

“It will be voted on the 18th,” Ryan said.

RCG, the most active downtown developer, came before the city several months ago with a proposal for a 100-room hotel, apartments, retail stores and offices on a 1-acre site it owns at the corner of Dodge and Washington streets. City planners suggested adding a piece of a Riley Plaza East parking lot so the development could be built closer to Washington Street, an idea both the mayor and developer liked.

RCG was the only developer to respond to the city’s legal advertisement to sell the land and abandon part of a roadway right-of-way, proposing $275,000 for the deal, the amount of a land appraisal.

Even members of the audience who spoke in the “opposition” section of last night’s hearing said they weren’t really opposed, just not sure what they thought or not necessarily in favor.

Teasie Riley Goggin questioned why the city was moving so fast and asked if anyone knew what would happen if the hotel or other parts of the development failed.

“What I don’t see right now is a master plan on where this is going,” she said.

Most of the concerns were about the 38 metered parking spaces the city will be losing. The developer has agreed to provide the same number of public spaces within the project’s 278-car garage, but those spaces will be owned by the developer.

Driscoll pointed out a number of benefits that she said will more than offset any lost parking revenue, which was estimated at $18,000. They include projected annual property and hotel/motel taxes of nearly $500,000 combined and the one-time land sale of $275,000, which she said could be used for public improvements in the area.

Councilor Paul Prevey asked a question likely on many people’s minds: the need for a third hotel in the downtown.

“Is that something that the market in Salem calls for — I’m talking year-round?” he asked.

“We believe so,” said Matt Picarsic, a principal of RCG.

Picarsic said they have been in talks with Maine Course Hospitality Group, which owns and operates 13 hotels in Maine, New Hampshire and Massachusetts and is affiliated with national brands such as Best Western and Marriott.

In a Salem News story last month, the CEO of Maine Course called Salem a “great market.”

There were other questions about RCG’s long-range plans for the Dodge Street area. Ryan, for example, asked if they have any plans for the Hawthorne Building, which has a number of offices and retail stores including Starbucks and Bank of America.

“I don’t know what your vision of that area is,” Ryan said.

Picarsic said they have no definite plans right now, adding that it was “highly unlikely” anything significant would happen to the Hawthorne Building. But he said that if the hotel development goes well, it could lead to other projects in that area.

“We’d like to make Dodge Street an active street,” he said.

The land sale will need a “super majority” of the council to pass, which means eight of the 11 councilors will have to vote in support. None of the seven councilors at last night’s hearing indicated opposition.

However, four councilors were absent: Mike Sosnowski, Arthur Sargent, Todd Siegel and Bob McCarthy.

If the City Council agrees to sell the land, Picarsic said they expect to file plans with the city in November. The project must go before the Planning Board and the Salem Redevelopment Authority. If all goes well, Picarsic said they hope to start construction in April and complete work in 2016.

Tom Dalton can be reached at tdalton@salemnews.com.

RCG’s Proposal

Scope: A $46 million development at the corner of Washington and Dodge streets with offices, retailers, apartments and a hotel.

Height: 5-6 stories

Parking: 278 spaces

Apartments: 70-80

Hotel rooms: 100

Property taxes: $300,000

Hotel/motel taxes: $196,000

Hotel jobs: 100 full and part time

Land sale: $275,000