NEW YORK—A Big Apple owner/developer known for its high-profile, multimillion-dollar deals in commercial and residential real estate is making a bicoastal foray into the lodging space with two diverse hotel projects.
Simon Baron Development (SBD) is under construction with a 30-story, 248-room lifestyle property here at 11-13 East 31 St. and, last month, acquired the ground lease on a vintage building currently housing a 600-room hotel in downtown Los Angeles.
According to President Matthew Baron, who leads the company with partner and founder/CEO Jonathan Simon, the Manhattan hotel, at the tip of the trendy NoMad district, has been under construction for several years.
As previously reported in Hotel Business, the property was slated to be managed by Commune Hotels & Resorts under its nascent value-conscious lifestyle brand, Tommie; however, that is no longer the case, according to sources with knowledge of the situation, with Commune not going forward with the Tommie brand concept for the project.
Baron would not comment on whether the hotel would be branded or independent, but did say it was opening this fall.
Even as it gets ready to roll out its first NYC hotel, SBD also is making its debut as a player in California, with its sights focused on reinventing the Stay on Main Hotel at 640 South Main St. in downtown L.A. It acquired the property via a ground lease in May from 248 Haynes Hotel Associates, LLC.
“We tend to be opportunistic, and this deal in L.A. came to us through a relationship,” said Baron. “Quite frankly, we were not looking for a deal in Los Angeles, but it was a very attractive opportunity.”
Indeed, the roughly 190,000-sq.-ft. building, once known as Hotel Cecil, has been a fixture downtown since the early 20th century. It currently remains operating as Stay on Main, a one-off, budget independent, whose historic facade and grand lobby and staircase belie the contemporary guestroom decor.
“We spent a little time just diligencing the asset and the economics themselves; that seemed very attractive. Then we went out to L.A. and we really liked what we saw. If you look at our portfolio, one of the things that we’re known for is coming into neighborhoods that are in transition or that have recently gone through a transition, and downtown certainly fits that bill, so that was something that was really, really attractive to us. It’s sort of a neighborhood on the rise and in transition; that combination of factors pulled us in,” said Baron.
The SBD plan is to redevelop the property so that it’s 50/50 hotel/residential.
“One of the other things that was very attractive to us about the property is the building itself. We felt it was a very interesting, historically significant building. There’s a lot of things we plan on doing through upgrades to try and preserve and keep in place a lot of the historic elements of the building while upgrading it,” said the executive.
In New York, Simon Baron Development is well known for its work with landmark and historically significant buildings, both large and small, including luxury rentals such as 80 Thompson, an 1880 building in SoHo; The Manhattan, an 1879 building in Yorkville that was the city’s first pre-war elevator building on the Upper East Side; and The Atlantic, six separate, vacant and dilapidated buildings that SBD connected and renovated—keeping the facades intact—in Brooklyn’s Cobble Hill.
“I think we’re very good at that type of landmark preservation,” said Baron.
Constructed in 1924, the Los Angeles building opened three years later as the Hotel Cecil, originally with 700 rooms, designed to accommodate business travelers and land developers who were flocking to the area, which was being built up with theaters, banks, shops and department stores, all connected outward by rail lines.
As with many downtowns, shifts in the economy and flight to suburbia gradually put downtown L.A. into a downward spiral, although one that city and community activists recognized and began fighting against as early as the late 1950s, effecting major redevelopment efforts that set the stage for the eventual skyscraper-building and the return of residential to the area over the ensuing years.
It may also be fate that the West Coast opportunity found its way into the hands of seasoned New Yorkers, who are perhaps unperturbed by the hotel’s notorious past, one that reportedly includes serving as one-time domiciles for Richard Ramirez, aka The Night Stalker, who terrorized L.A. in the mid-1980s, and his alleged copycat, Austrian serial killer Johann “Jack” Unterweger, in the early ’90s.
The hotel again made headlines in 2013 when the body of a 21-year-old Canadian hotel guest who had disappeared was found in one of the property’s rooftop water tanks.
While not the type of subject matter in SBD’s purview, Baron is looking to embrace travelers who are tech-savvy, trend-sensitive explorers of new neighborhoods and authentic experiences. “We’re going to try and appeal to the demographic you see coming into downtown L.A., which is more of the Millennial set. I would look at us and what we’re trying to do as more in the direction of an Ace Hotel. The property has a lot of potential in terms of F&B and amenity space, both for the hotel and the residential, which we think is going to be a big driver for us,” said Baron.
Rather than casting SBD as a pioneer of the neighborhood, which Baron sees as already on its way up, he considers the new project “additive” to the overall push. “There’s enough already going on right where we are; we’re certainly not going to be the catalyst,” he said, noting reports of a million-sq.-ft. mixed-use development recently announced for a site proximate the hotel.
“One of the things that we liked is when you walk around that area is the amount of retail and restaurants (e.g., Bäco Mercat, Shake Shack, Sugarfish) that you’re starting to see come into the area. That really make you feel almost what Williamsburg [in Brooklyn]was like maybe 10 years ago, or Hell’s Kitchen [in Manhattan]a few years ago. You can feel the neighborhood changing and heading in a certain direction,” he said.
Baron indicated the project is currently self-financed although, as it moves forward, additional financing likely would be in the mix.
As it expands to the West Coast and penetrates the continually burgeoning boutique/lifestyle hotel space, Baron feels the company’s initial effort will resonate with the area and those traveling to it. “I think once we restore the hotel to its former glory in terms of architectural significance, that’s going to make it a special property. That’s point number one. I also think it’s location. It’s right in the center of everything that’s happening in downtown L.A. The lobby is very grand and we’ve definitely got the space to really do some interesting things with the F&B. It’s a little bit early to see what that’s going to look like, but I think the F&B is going to be a very important part of this property,” said Baron.
The project is expected to go under construction/restoration in spring 2017, with a two-year stretch to opening.
Baron said the firm, which controls some $1.7 billion of real estate, would remain opportunistic on both coasts across all its sectors, observing hotels would be “down the road, an area of growth for us.” HB