By Mark Hansel
NKyTribune managing editor
Ground was formally broken on the $21.5 million The Hotel Covington Thursday.
Instead of the ritual lifting of shovels filled with dirt, partners in the project popped champagne corks to signify the ceremonial beginning of construction on the hotel.
The Salyers Group of Covington, which also owns the adjacent Madison Events Center, is partnering with Aparium Hotel Group of Chicago to develop the historic building at 638 Madison Avenue.
“Today is an historic day,” Salyers Group President Guy van Rooyen said. “The Hotel Covington will not only generate new jobs within the urban core, but it will accelerate the transformation of downtown Covington. I couldn’t be more pleased with our partners who worked to make this project a reality.”
The Salyers Group is a diversified investment company holding assets in the areas of real estate, retail, entertainment and apparel catalog, as well as hospitality.
The 114-room luxury hotel will include a signature restaurant, bar and patio and is scheduled to open in about 11 months, during the summer of 2016.
The structure commonly known as the Coppins Building, because it housed a department store with that name until 1977, was constructed in 1908 and was the city’s first skyscraper.
In 1984, the City of Covington purchased the building for $1.5 million and renovated it for use as its city hall from 1990 until 2013, when city offices were moved to Pike Street.
A large crowd assembled for the groundbreaking on the first floor of the structure, which bore little resemblance to the city hall of recent memory or the upscale boutique hotel it will be transformed into during the coming months.
Covington Mayor Sherry Carran lauded the developers as visionaries who embraced the city’s Center City Action Plan and did not listen to the naysayers.
“In my heart, I always knew this project was going to happen because of the people involved,” Carran said. “Today, for me, this is proof that those who are creative, determined and have the knowledge and the will can make good things happen. I’m just glad they picked Covington.”
The project is being financed through a combination of private equity, government-issued bonds, historic and tourism tax credits and bank financing.
It was among the first investments of the Catalytic Development Fund of Northern Kentucky and fit the group’s plan to provide development and capital acquisition services to assist with the execution of high-impact projects.
“I want to make sure everyone understands the great commitment of our Catalytic investors,” Catalytic Fund president and CEO Jeanne Schroer said. “Financing a project like this, that does not fit inside a typical commercial real estate project box, is very difficult. It requires lenders and investors willing to do the extra work to understand a non-standard product type.”
Former Covington Mayor Chuck Scheper was in office in October 2012, when the project was announced, and worked closely with the developer to bring it to fruition.
“The announcement of a hotel deal was the first real sign of positive development in the urban core,” Scheper, chairman of Bexion Pharmaceuticals in Covington, said. “It was important in that it sent a signal to other developers and investors that Covington was a place to consider and it didn’t just have to be on the riverfront.”
Eric Summe, CEO of the Northern Kentucky Convention and Visitors Bureau, said the hotel will be a great asset to the region’s tourism business.
“This hotel could absolutely be a catalyst for five blocks in every direction for Covington,” Summe said. “When we bring groups, conventions and meeting here, they are looking for a vibrant destination, they are looking for activity and things to do. Plus, this is going to be a boutique hotel targeting wedding business, so this could be a real spark for the entire city.”
Employees of Rima’s Diner, located directly across Madison Avenue from the new development, shared that optimism.
Kim Skidmore a cook at Rima’s, said she expects the hotel to greatly increase business at the restaurant.
“With all of the accommodations over there, we are the restaurant closest to it, so it should really help us,” Skidmore said. “People who stay there are going to want homemade dishes, not fast food, and that’s what we have here.”
The Aparium Group is known for successfully developing and managing independent upscale hotels. Its projects include The Iron Horse Hotel in downtown Milwaukee, Wisconsin and The Elysian Hotel Chicago.
The company plans to be actively involved in the development, marketing, branding and operation of The Hotel Covington.
Contact Mark Hansel at mark.hansel@nkytrib.com