City should follow Strand’s suggestion to sell St. James after it reaches potentialPublished 6:37pm Friday, April 4, 2014
City officials are pushing the St. James Hotel into a new era. The city management era was fortunately brief, but it appears the next phase of operations will be controlled by Strand Management, with offices in Charlotte, Atlanta and Myrtle Beach, S.C.
But Strand’s era of management may also be brief, as the company said Thursday that the city should look to sell the hotel. Strand’s strategy is essentially to come in and make the hotel profitable before the city sells it.
Owning the hotel isn’t really a profitable situation currently and will likely never be a large source of revenue for city government. Money earned from room rentals must be immediately reinvested in the St. James daily operation.
With a knowledgeable management company, the St. James may bring in more profits from the city-owned hotel, but they aren’t large enough to make owning the hotel worthwhile.
Wouldn’t it be more beneficial, for the city as a whole, if the hotel was sold and a company could focus its full efforts on improving the St. James’ quality.
The city has too many other important issues to worry about to divert a significant amount of attention to the St. James.
Renovations alone are expected to cost upwards of $3 million to make the hotel word-class.
Sometimes a hands-off approach is better.
The city should approve the contract with Strand, let the company work and sell the hotel once it reaches its maximum potential.
If the St. James can reach it’s potential, perhaps a revitalized downtown Selma will one day become a reality.
In its current situation, few of the employees have extensive management experience. Strand said it has a strong resume of restoring distressed hotels, which certainly seems to be a true statement.
But our opinion remains that owning a hotel and leasing it to a third party isn’t sustainable.
By selling the hotel, Selma government can capitalize on what will hopefully be a profit and, in turn, reinvest it into the city.