Springfield isn’t the only place David Mitchell wants to leave his mark.
In Erie, Pennsylvania, Mitchell’s New York real estate development company, GoodHomes Communities, LLCis looking to buy the downtown Avalon Hotel and turn it into a 219-unit apartment complex.
GoodHomes won zoning board approval late last year to convert the former Sheraton hotel overlooking the airport in Warwick, Rhode Island, into one- and two-bedroom apartments.
Speaking to the Springfield City Council twice over the summer about his offer to buy the Downtown Wyndham700 E. Adams St., Mitchell said he has converted 1,100 apartments in Las Vegas and has been involved in developments in Birmingham, Chattanooga and Glenview, Illinois.
Mitchell declined to speak to the State Journal-Register ahead of the Oct. 18 council vote on a “density variation” that would clear the way for the sale. Under plans for the proposed sale, Mitchell would pump $40 million into the former Forum 30, which dates from 1973, retaining 125 hotel rooms and converting 275 rooms into apartments.
Mitchell needs a waiver for anything north of 200 apartments.
This is the third time the issue has come before City Council since July, but unlike the previous two votes, it will not need a super majority vote due to the September 21 action by the Springfield Planning and Zoning Commission.
Regarding GoodHomes’ other projects, Mitchell referred a reporter to the company’s website. It lists projects in Omaha; Tulsa; Groton, Conn. ; Ringgold, Georgia; Lynchburg, Virginia and Burlington and Fayetteville, North Carolina, but did not provide details.
A lawyer for Mitchell said GoErie.com that the developer also had businesses in Detroit and Columbus, Ohio.
In one of his most spectacular purchases, Mitchell acquired Herald Square Hotelnow Life Hotel, Manhattan for $38.5 million in 2015. The mid-1890s Beaux-Arts building once housed Life Magazine.
Like the Wyndham City Center, the Avalon in Erie has struggled to maintain.
And like Springfield, Mitchell was seeking a waiver to convert the struggling hotel into a destination for young city dwellers.
One-bedroom apartments and studios in Erie would rent for between $750 and $1,000, including utilities.
Mitchell’s Springfield proposal called for mostly “studios,” between 350 and 400 square feet, though some were one- and two-bedroom apartments. Rent would range from $700 to $1,200 a month, he said.
“(Mitchell) has the wherewithal to do it,” attorney Michael Agresti told a reporter of the Avalon project.
In the article, Agresti claimed that a large number of hotels and residences for people aged 30 to 40 were becoming “obsolete for their original purpose” and that Erie and other cities were facing a shortage of “new clean and safe housing for the workforce”. .”
GoodHomes lobbied for a spread for the 219 apartments. The square footage would have capped the number of bedrooms at 150, but Mitchell said that was not financially viable.
The former Warwick hotel would seek a similar “labour” clientele who would pay $850 to $1,100 in monthly rent, according to the Warwick Beacon.
Some 207 apartments are planned for the former five-storey hotel.
There, Mitchell proposed building a “parking lift” that would store cars vertically.
Ryan McCrady, President and CEO of Springfield Sangamon Growth Alliancesaid he spoke to his economic development counterparts in Warwick about Mitchell’s involvement in the project.
“As far as the development process, getting the necessary approvals and so on, (people said) that (Mitchell) was good to work with, that he was able to fund the project, that he hadn’t had any issues with design or code compliance and they felt it was a good experience working with him,” McCrady said.
McCrady warned that the situation in Warwick “would not be an apples-to-apples comparison” to Springfield in terms of the hotel’s location or its membership in the convention group.
“The situation of each community is very individual,” he said. “My questions for them were: did this developer perform as they advertised? Did they provide the information they needed?”
Ward 8 Ald. Erin Conley called Mitchell “a creative developer who’s done some really cool projects.”
Conley, who voted against the variance Aug. 3 and continues to be a supporter of having more hotel rooms at the Wyndham, said she doesn’t think Mitchell’s model will fly in Springfield.
“I just think people would expect more space for the amount of rent he’s offering right now,” Conley said. “I don’t know if a modified hotel room will attract a lot of people to apartments. I wouldn’t disagree with his statement that there is a demand and a desire for residential apartments downtown. I just disagree with the size and location.”
Early last year, the Beacon reported, the hotel, then a Wyndham, was at risk of a tax sale because its owners owed about $850,000 in back taxes, but that was eventually avoided.
As previously reported in The State Journal-Register, the city has put extraterrestrial on the Wyndham City Center for non-payment of a $1 million utility bill to City Water, Light and Power.
Mitchell said he would assume all liens if a sale occurs.
Contact Steven Spearie: 217-622-1788, [email protected], twitter.com/@StevenSpearie.