Inside Your Town

Allentown's transformed Americus would be more than a hotel

If plans to revitalize the landmark Americus Hotel succeed in center-city Allentown, the building no longer will be just a hotel.

In fact, less than half of it will be a hotel.

An 85-room hotel will be just one of several uses inside the building, along with 48 apartments, commercial offices, stores and restaurants on the lower levels and another large restaurant or banquet room on the top floor.

That just might be why the project is being called "Americus Center--- An Historic Hotel," rather than simply the Americus Hotel.

Plans for the property at 6th and Hamilton streets, including how many people will be employed there, were outlined for members of the Allentown Neighborhood Improvement Zone Development Authority in City Hall Tuesday morning.

"The Americus Hotel is too important to fail," said Alan Jennings, who chairs the ANIZDA project review committee that held the meeting. "The outcome for us is a grand building, properly managed."

"My greatest concern is we do not want to have a project that is going to fail," said ANIZDA chairman Seymour Traub. He said if ANIZDA approves a project that goes belly-up when only half completed, that building will "sit vacant and stalled in the middle of our city."

Albert Abdouche, owner of the Americus, and Michael Stoudt, his consultant, were hoping to get a bright green light from the committee that their project was approved for NIZ financing.

The signal they got was more of a proceed-with-caution yellow, but they were satisfied.

"The record can show you've got the blessing of this committee,"
Jennings told the developer at the end of the meeting. "Good luck to you and thanks for the investment you are making in our city."

Jennings said his committee supported moving the project forward with "a collective nod rather than a formal vote." He explained his committee decides "what's going to pass muster for NIZ support. We gave that to them, with a number of conditions.

"We want to make sure they put the materials and the quality of construction into this building that a historic landmark hotel deserves. We want it restored to its historic grandeur."

After the meeting, Stoudt said: "We got everything we needed and we expected there would be some concern over the project cost." He said Abdouche now has 120 days to acquire bank financing. "And then the full ANIZDA board must vote on approving the loan and approving the development agreement."

Stoudt told the ANIZDA committee: "Within 120 days of getting a green light today, we will obtain a commitment letter from a bank or private financing.

"And before closing on the loan documents, Albert has made a commitment that the hotel will be brought to code. This isn't required by the ANIZDA guidelines, but it's something he wants to do."

The project has a proposed price tag of about $13.2 million, for which Abdouche hopes to get NIZ financing.

If financing can be arranged, he anticipates the transformation of the building can be completed in six to nine months.

He said he already spent $3.2 million to acquire the building, plus more to remove scaffolding that was around the exterior and to improve electrical and sprinkler systems. "We did a lot of inside work.
Cleaning out costs a lot of money." He said the roof has been partially repaired to stop leaks, but it's not finished yet.

Abdouche put the total project cost at $16.5 million, "$17 million maximum."

Traub said the total cost may be more like $20 million.

Protection against failure

"I wish Albert the best of luck, that he will be able to pull this all off," said Traub. "But we have to establish what an independent estimator thinks it is going to cost."

Traub said ANIZDA should require Abdouche to post a bond to cover the full project cost, as determined by that independent project cost estimator. That way, said Traub, if Abdouche would be unable to finish the project, the funds would be available to have someone else take over and complete it.

"The one concern I have is that we will have a failed project in the middle of the city," said Traub.

"We hear you on that," said Stoudt.

Traub said ANIZDA will find someone to do that independent estimate of the project costs. It was unclear how much such an estimate will cost
--- someone guessed $5,000 --and who will pay for it. Traub said he will get feedback about the cost from some major local contractors "and then we can talk about who is going to bear that cost."

Stoudt is concerned that someone doing such an estimate might say everything needs to be repainted, ripped out and redone.

Despite his concerns, Traub said the Americus "clearly is an important development" in center city.
Stoudt said he told Abdouche to stop working on the building, and to stop spending his own money on it, until he has NIZ approval, "but he wants that building to succeed and he wants there to be progress every day. This speaks to Albert's commitment to that building. The city is benefiting from that, rather than a building setting unattended and crumbling."

A symbol of urban decline

Jennings said not too long ago the Americus was in the wrong hands, actually was crumbling and had become "almost a symbol of urban decline in Allentown."

The 13-story building was built in 1927. It has been closed since 2002 and is completely empty. Abdouche purchased it in 2010 and has been working on it ever since. In 2012, he finally succeeded in getting the city to expand its center-city Neighborhood Improvement Zone to include the Americus property

The NIZ was created as an economic development tool to spur the current transformation of downtown Allentown, as well as part of the Lehigh River waterfront in the city.

State law allows some state and local taxes collected by businesses within an Allentown-based NIZ to be used to fund economic development projects within that zone.

ANIZDA approval of a project means it is eligible to receive help to pay off loans, explained Jennings after the meeting. "Part of the way they get the bank loan is we will guarantee a certain amount of the revenue to pay that debt. We don't make loans. We help with debt payments."

Hotel operation

Abdouche intends to hire a professional hotel management company to operate the hotel in the property. Stoudt promised it will be "someone recognized in the industry as knowing how to run a hotel. When you all see their resume, you'll say 'Great! This is a class operation coming to help a class developer develop a landmark property'."

The hotel will seek to earn and then maintain a triple diamond rating from AAA.

Jennings indicated if the Americus does not meet and maintain such standards, ANIZDA could withdraw its support from the project.

The hotel will be on the building's first five floors. Only the lobby will be on the first floor, with all guest rooms on floors two through five.

Floors six through eight will be apartments. Floors nine and 10 will be office space. "There is a possibility the ninth floor will be converted to offices depending on the demand," said Stoudt.

He said when the hotel is operating, along with the new Marriott Renaissance hotel in the first block of N. 7th Street and the Holiday Inn at 9th and Hamilton, "it will allow for us to attract some large conferences that will meet in the PPL Arena."

As for parking, he said they are working with the Allentown Parking Authority to develop valet parking for the Americus, using nearby parking garages.

Stoudt maintained the work to be done on the Americus will create at least 25 new construction and building supply jobs. "I believe these are conservative estimates."

Stoudt said Abdouche wants to meet NIZ requirements "to use local workers at prevailing wages, including locally sourced materials."

One concern raised by ANIZDA board members at the meeting was many contractors on a list from the developer are from out of state, but almost none are from the local area. "We don't have to go with these contractors," said Abdouche.

When fully functioning, the property will have 317 new service sector employees. Stoudt, who called them "good paying jobs," said those employees probably will take buses to the Americus or walk from nearby neighborhoods. He said the completed project will help raise median salaries in Allentown.

He said Abdouche has made a concerted effort to find women and ethnic minorities to both work in the building and occupy some of its space.
He said a coffee shop will be leased by a woman and a barber shop will be owned by two Latino men.

He also predicted 80 new professional jobs will be in the building's office space.

Jennings said Abdouche was involved in restoring the former Ice Palace skating rink in east Allentown, which had been a blighted property. It is now called Palace Center and weddings, banquets and other events are held there.

This Week's Circulars

Inside Your Town

Latest From The Newsroom