HRI Has Record of Preservation
April 11, 2004
By Charley Hannagan, Staff writer
The HRI Group has taken a mission for restoring historic buildings
and turned it into a passion for community revitalization.
The developer has renovated warehouses into luxury apartments, turned
an old department store into a swanky hotel in New Orleans and restored
an abandoned hotel into the premier convention hotel in St. Louis.
Now HRI wants to do the same in Syracuse by turning the 80-year-old
Hotel Syracuse into a four-star hotel, at a cost of $90 million. It
wants Onondaga County to name the hotel as the convention headquarters
for the Oncenter. The designation opens up financing for the project.
"If you tore this down, then there are holes and parking lots. A
building like this is the heart and soul of a community. You can't tear
it out, or the body dies," said Eddie Boettner, HRI co-chairman.
HRI renovates properties in public-private partnerships that involve
complex financing. The New Orleans company has done more than $600
million in projects and employs about 200 people.
The privately held company does not discuss its revenues. However,
New Orleans City Business reported in March that the company earned $11
million in gross revenues in 2003, up from $9.4 million the year before.
Boettner's father, Edward B. Boettner, had founded a graphics company
in New Orleans before turning his efforts to reusing old buildings. He
and Pres Kabacoff founded Historic Restoration Inc. in 1982 and began
converting a fiber mill into loft-style apartments in their native city.
Edward Boettner died in 2000. Kabacoff and Boettner's son, Eddie
Boettner, co-chair the company.
The company became the HRI Group last year. It includes Historic
Restoration Inc., HRI Lodging Inc., HRI Construction Inc. and HCI
Its projects cross economic lines to include luxury apartments, mixed
income and senior citizen's housing. Projects also include hotels, shops
"The locations in every project that we've done have been right on.
We've never had a project go out of business on us, whether it was
residential or hospitality," Boettner said.
It's difficult to point to HRI's projects alone as the stimulus for
neighborhood revitalization, said Hal Fairbanks, the executive heading
the Syracuse project.
"But when you build a project in a blighted area and then the next
thing you know the blighted area improves and gentrifies with new
business and new investment comes in - it's not rocket science to figure
out what was the catalytic that did that," he said.
HRI executives have talked generally about the possibility of doing
other projects in Syracuse, but have no formal plans, they said.
"Sidney (Bartholomew, the former mayor of New Orleans), one of our
co- workers, described it as restoring a community's confidence in
itself," Fairbanks said. "It's something that's hard to gauge, but it
becomes palpable, you can see it, you can feel it."
Syracuse lacks confidence, he said. The community doesn't believe the
project can happen because the politicians won't agree, or the
convention center operators won't like it, Fairbanks said.
"But beyond that, they also think, 'Who would invest the money? Why
would we do that? That hotel is dead,'" he said. "It's sad when you
think about what that means for the people who are saying the heart and
soul of our community is dead."
HRI's quest to become the designated convention headquarters hotel
for the Oncenter raises several issues.
When Onondaga County asked for development proposals for a hotel to
serve the Oncenter, HRI was the only one to suggest renovating a
property. The other four plans call for building a hotel.
Whether a hotel must be physically connected to the Oncenter is
HRI says locating a new hotel next to the convention center isolates
conventioneers. There's nothing at that end of town, other than the
Everson Museum of Art, executives said.
Guests of the more centrally located Hotel Syracuse may easily walk
the couple of blocks to the shops and restaurants in Armory Square, they
Proponents of a new hotel say it must connect to the Oncenter to
Hotel industry experts agree.
"That's important," said Barry Sternlicht, chairman of Starwood
Hotels & Resorts, which has Sheraton as one of its franchises.
"Unfortunately, conventioneers like to walk straight from the hotel to
the convention center, especially in a town like Syracuse where the
weather's not always cooperating."
Sternlicht spoke at a recent hotel industry conference at Cornell
The Hotel Syracuse connects to the Oncenter through an unused tunnel
and underground parking garage.
HRI officials said they are exploring options to improve the
connection. The options could include an above-ground connection through
the business incubator center on the south plaza of the MONY Towers, or
an improved, dedicated space through the parking garage.
No matter how well-intentioned HRI's plans, critics say the county
can't take the chance that the twice-bankrupt hotel will go belly up
again - killing a chance to make the convention center successful.
HRI's plan is complex.
The bank that owns the property would turn the hotel over to Rebuild
Syracuse, an arm of the city. The bank would receive a federal tax
credit worth 20 percent of the project cost for the property.
Rebuild Syracuse would then turn the property over to HRI.
HRI would use private financing and tax credits to pay for the
restoration, creating 359 modern rooms. The company would seek a $44.7
million first mortgage, and a $27.6 million second mortgage.
The company has proposed that the county provide a credit
enhancement, similar to cosigning for a loan, for the second mortgage,
How much the county would be required to pay should the project
default is subject to negotiation with the lender, he said. It could be
as little as 10 percent of the loan, or $2.7 million, Fairbanks said.
HRI also needs the county's blessing as the headquarters hotel for
the convention center.
Even though the company would get the hotel for $1, "if we don't get
designated, we'll probably give it right back," he said. "We can't
figure out to make it work financing-wise."
It's difficult to find someone to criticize HRI's performance. It has
won awards from groups such as the National Trust for Historic
Preservation, the U.S. Environmental Protection Agency and Department of
Housing and Urban Development.
HRI takes on challenging projects, said David Listokin, a visiting
professor at the master's in preservation program at Cornell University.
He is a professor at Rutgers University and co-director of its Center
for Urban Policy Research.
Five students from Listokin's Cornell class have researched HRI's
Hotel Syracuse project for its economic viability and its impact on the
community. They will present their report in May.
"HRI is a player with a track record, and I think that's particularly
important here," he said. "If this was a group that hadn't done this
before, I would say this is a difficult thing to do. But they've done
it. One can go to St. Louis and New Orleans and other cities where they
have taken facilities in as bad shape as the Hotel Syracuse, and they've
turned it around."
Even Sharon Tyus, one of two St. Louis aldermen who voted against
HRI's proposal to restore a hotel there, praises HRI. Her vote was
against using federal Community Block Grant money for part of the
project, she said.
"I liked the whole idea of saving the buildings. I like all of what
they were doing with it," said Tyus, who no longer sits on the board.
"My problem was with the money."
© 2004 The Post-Standard.