Owners’ decision to spend $30 million to renovate Charleston Place’s guest rooms is a noteworthy sign of its success and of confidence in Charleston’s future.
The luxury hotel had record second-quarter earnings, up $20 million (14 percent) from last year’s second quarter.
The redo is also an affirmation of those who won the hard-fought battle to get the hotel built in 1984.
Some residents objected to plans for the hotel, fearing too much congestion and believing the building would overwhelm its neighborhood. It covers much of the block bound by Meeting, King, Market and Hasell streets.
They were able to modify the design of the building, but not to stop it altogether.
Even many of its one-time critics concede now that the Charleston Place has played a large role in the reinvigoration of King Street and the growth in tourism.
Its impact on the economy is believed to be billions of dollars.
Charleston Place added a new high-end option to the local tourist market. It has maintained its luxury reputation, and general manager Paul Stracey says the renovations will make it even more elegant.
All that good news raises a perennial question: What about the money Charleston Place owners owe Charleston’s Local Development Corp.? The tab is now at $24.6 million for the original $10 million HUD construction loan, and it is growing $600,000 each year.
The terms of the loan include an ultimate deadline of 2028, but it could come due before that if the hotel achieves a positive cash flow.
It appears that they have done just that and more, since owners are able to sink $30 million into the planned renovations. But the loan allows them to subtract money for future operating expenses, capital expenses and debt payments when calculating cash flow.
So the LDC, a non-profit organization whose mission is economic development and blight reduction, will have to wait for the windfall.
The LDC is technically independent of the city, but linked to it by the fact that the mayor sits on the board, the director is paid by the city and the office is city-owned.
When Charleston Place owners repay the loan, it will be one more way the hotel has benefited the city.