Ideas on how to save St. James Hotel

Published 9:58 pm Friday, June 12, 2015

Dear editor,

Selma continues to struggle with the St. James Hotel and how it needs to be brought back to the shape it was when originally renovated and fully operational.

The primary reason for its current condition and the dilemma we now face is that the previous managers and owners did not do as they should have — perform routine maintenance and market the property properly. It is indeed a tall order but there is always a way to make something better for all parties.

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The following is one man’s opinion:

The Saint James needs a national flag or franchise — without it, it cannot be successful. This is an established fact in the hospitality industry and has been for years.

Currently there are only two possible candidates in the market that will flag a small historic property and maybe just one. We need to approach them for input and guidance.

In order to obtain a national flag, a hotel must have 60 rooms. That means the addition of 20 more rooms. This can be done in the adjacent building, I believe. The typical cost of a room is $100,000 per key or $2 million dollars.

The hotel must have a fitness center. This would cost approximately $150,000, including equipment, and I believe it can be done within the confines of either the existing hotel or the structure adjacent where the 20 rooms would be added.

The hotel must be brought up to franchise standards — my rough estimate is this would cost around $3.5 million or more based upon the current condition of the existing facility.

Selma market demographics are marginal at this time until we experience more growth which is of course the ultimate objective — there will have to be some incentives from the city in order to make it viable. Abatement of property and lodging taxes for a definitive period of time will be a good start. It may require more.

Cost involved in bring hotel up to required franchise standards will be approximately $6 million. This includes both hard and soft costs. A new 70 bed Hampton hotel costs about $7 million. Plus, the market for a high end, full service hotel in Selma is limited but needed if the downtown is going to survive and grow.

Fact is that occupancies are going to run below industry standards, but Selma needs the hotel as a vital part of its downtown redevelopment.

Food service and ancillary services would have to be first class in order to attract local business for lunches, dinners, beverage receptions, etc.

Safety would also be an essential. In the past, this has been an issue, and the city must be prepared to insure the safety of the areas surrounding the property.

In order for this to be viable, there needs to be a public/private partnership with either a bond issue or grants and gifts from the private sector to lower the debt service requirements. Accordingly, these investors should expect a return on their investment — be it direct or indirect.

A professional management group needs to be in place to run the hotel, and it will need to be paid out of revenues, not by the city, so the hotel will not be a drag on the city budget.

Effectively, there has to be an incentive based contract. There is an Alabama based group that handles our hotel, and it is outstanding.

If all of the above can be accomplished and debt contained then the city will have what it wants — a flagship for the downtown redevelopment efforts. If the debt can be reduced by grants or low interest loans, this will help to insure the hotels needed long-term viability. Formation of, or partnership with a nonprofit entity may be a possible solution.

It’s going to take an unprecedented effort of the public and private sector to make this happen.

The longer we wait the more the facilitating due to lack of needed maintenance — both current and deferred.

It’s time for us all to wake up and address the issue head on. We don’t need an out of state angel management group that’s being paid whether they produce or not. Facts are and have been proven this doesn’t work. It has to be a local effort and the talent and expertise is already here. The city needs to take the lead here and make it happen. The private sector will respond — they love this community and have always responded to every challenge when put before them.

Tom Bolton

Managing Member Hampton Inn, Jackson