SalemNews.com, Salem, MA

June 4, 2013

Developer's bid includes hotel plan

BY TOM DALTON
STAFF WRITER

---- — SALEM — Earlier this year, a Somerville developer turned a few heads by announcing plans for a $45 million downtown development that would include a small hotel.

Yesterday, RCG made clear it still likes the idea by including a 100-room hotel as part of a proposal it submitted to purchase a small parcel of city land, part of a parking lot in Riley Plaza East that is next to the development site.

“We’ve been in discussions with a regional hotel developer ... who has expressed preliminary interest in working with us on the hotel component,” said Matt Picarsic, a principal with RCG.

“They say they have done their analysis and think the market will support a select service hotel with a national brand,” catering to family and business travelers, he said.

RCG’s interest in a hotel is a sure sign of how much the city has changed over the past decade, a span that has included several multimillion-dollar developments and the opening of more than a dozen new restaurants.

In 2004, the Salem Waterfront Hotel opened after reaching a settlement in a long legal battle with the historic Hawthorne Hotel, which had tried to block construction, arguing that the city didn’t have enough business for two hotels.

In 2007, the Salem Waterfront Hotel proposed an expansion, but those plans have been stalled.

Picarsic declined to go into more detail or say how much his company offered to pay for the parking lot, a 20,000-square-foot parcel next to an acre of its own land along Dodge and Washington streets.

More details are expected once the bid document is reviewed by city officials and becomes public. Yesterday was the deadline for submitting proposals to buy the land.

Before the land is sold, the proposal must go to the City Council for a public hearing and vote. If RCG is successful, it will submit a formal development plan, which will be reviewed by several city boards.

As expected, RCG submitted the only bid proposal in a sale earmarked for the Somerville developer. City planners suggested selling the small piece of land to RCG so it could be incorporated into the development.

Since the bid proposal is not yet public, Picarsic talked in general terms about his company’s proposal to build a five-to-six-story building with apartments, offices, a parking garage, retail space and a 100-room hotel.

“We submitted what we think is a very thoughtful proposal that would incorporate a city parking lot into a larger mixed-use development,” he said. “We’re excited about it.”

There have been some changes since the original plan was announced in January.

Picarsic said they gave strong consideration to an urban grocery as an anchor retail tenant but dropped the idea.

“We’ve reached out and met with a number of potential operators for an urban grocery, and the interest has not been good at all,” he said.

Although the city suggested selling this land to allow the development to be built right along the sidewalk to give the project an urban feel, Picarsic said they are not proposing it be sited that close to the sidewalk. There is an issue with utilities, he said. In addition, he said a number of people have asked them to leave space for public seating.

“We think it’s a better plan,” Picarsic said.

RCG’s current proposal calls for 70 to 80 apartments and a parking garage with about 275 spaces, of which 38 would be allocated for public use to replace spaces lost at Riley Plaza East.

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