On the upside, developers of the proposed Holland Hotel got the city’s pledge of support; on the downside, owners of the well-established Marriott were taking the city and county to court; and on the downtown fringe, prospects of a long-awaited Residence Inn remained prospective – but coming along.

Incentive

City Council members unanimously approved a $605,000 incentive grant for Gentian Group’s plan to convert the former Home Savings Building into a 54-room hotel, but no money changes hands unless:

• Gentian starts reconstruction by March 1, 2013, and is ready for business by April 30, 2014;

• Durham County puts in $605,000 too. (Gentian has approached the county about an incentive, but the request has not been presented to the county commissioners.)

Incentive payments start at least nine months after the hotel opens and has time to start paying the occupancy and sales taxes to cover the public cost. Payments are spread over seven years, but to keep getting them after year two the hotel must meet a job-creation target. If the Holland Hotel makes more money than projected, the city may reduce the incentive amount.

All in all, the deal “makes sense for Durham city taxpayers,” said city Economic Development Director Kevin Dick.

Gentian Group’s principals are local businessmen: Daniel Robinson and Bradley Wiese, partners in Atlantic Regional Center for Foreign Investment, and Carey Greene, broker with Maverick Partners Realty. Wiese is also Maverick Partners’ president.

They plan their Holland Hotel, at the corner of East Chapel Hill Street and the Holland Street Mall, to be a “select service” establishment, meaning not as fancy as the proposed 21c Museum Hotel in the Hill Building, which won conditional city and county incentives totaling $7.7 million. The Holland will, though, have a restaurant and a rooftop bar.

Like 21c, the Holland Hotel is an “adaptive re-use” for a downtown landmark. The art deco Hill Building, opened in 1937, was for many years headquarters for the family-owned Central Carolina Bank. The Home Savings building, also known as the Mutual Community Savings building, is an emphatically modernist 1968 structure with a distinctive rounded tower at one corner.

With the Holland and 21c, downtown Durham would gain 179 hotel rooms to go with the 188 at the 1989 Marriott, which shares its building with the Durham Convention Center.

Lawsuit

The Marriott’s owner, Shaner Hotel Group of State College, Pa., has filed suit in U.S. District Court against Durham County and the city of Durham, joint owners of the Convention Center building.

Shaner claims the city and county violated a 1997 “air lease” agreement under which it has rights to use the hotel and some areas of the Convention Center.

“We had a great relationship,” said Shaner Vice President George Wolfe. Then, after Convention Center renovations in 2011, “Suddenly, the city and county locked us out of the manager’s office and the human resources office, and our quiet enjoyment was no longer quiet,” Wolfe said.

Until July 2011, Shaner also managed the Convention Center but the city and county switched to a new management company when Shaner’s contract expired. The city and county offered Shaner a contract to lease the offices in return for its paying for maintenance and janitorial service; Shaner claims it is already paying that under its air lease. The city and county disagree.

“We believe the Shaner Hotel Group has no basis for occupying the spaces ... and the lawsuit itself is unfounded,” said Senior City Attorney Sherri Zann Rosenthal.

Wolfe said Shaner’s rent for the air space depends on its income from renting rooms. In 2011, he said, the company paid the city and county $250,000 and has already exceeded that amount in 2012.

Coming, coming

At Main and Watts streets, between Brightleaf Square and Duke East Campus, the 1926 McPherson Hospital building stands in an idle construction site. Concord Hospitality Group of Raleigh bought the 1.6-acre site in 2006, with the idea of incorporating the historic building into a new hotel.

The idea is still alive, according to Concord Vice President Kevin McAteer when contacted by The Durham News last week.

In 2008, Concord demolished two not-historic wings to prepare for construction, but then the recession came and the site has sat growing weeds behind a green fabric-lined fence, the hospital building itself boarded up and weathered.

In 2010, Concord broached the idea of tearing the old building down and starting from scratch. Neighbors and Durham preservationists objected, and Concord went back to its earlier plan to make the McPherson part of its hotel.

Now, according to McAteer, Concord has finished construction drawings and is evaluating contractors’ bids for a 143-suite Residence Inn by Marriott. The company intends to break ground before the end of this year and open in the first quarter of 2014, he said.

The Residence Inn will have a “very custom interior, urban chic feel like no other hotel,” he said.