[PRCo] Re: & East Liberty

[Jerry MATT Matsick]

Leaders say East Liberty can handle hotel 
boom
Saturday, October 18, 2008
By Mark Belko, Pittsburgh Post-Gazette
Pittsburgh long known for great Universities and Hospitals can
this be a part of a BOOM or Rebirth for the city.   Perhaps even
a trolley or light rail line to dawntawn!?

At first blush, it might sound like a bit of folly.
Three new hotels being built in East Liberty, within a couple of blocks of one another, in the midst of a troubled economy?
But local development officials and the operators themselves say the construction of hotels so close to one another isn't as surprising as some might think, particularly given the nearby medical centers and universities and studies showing a need for as many as 450 rooms in the area.
"We believe East Liberty is well-positioned to accommodate the hotel base," said Ernie Hogan, deputy director of East Liberty Development Inc., the agency that's been the driving force behind much of the neighborhood's rebirth.
Developer Governor's Hotel Co. LP has plans for a $21.4 million, 140-room Hotel Indigo at North Highland Avenue and Broad Street in the heart of East Liberty's commercial corridor.
Another developer, HSH Liberty Suites LP, is planning a $42 million development on South Highland that includes a 105-room Homewood Suites hotel and an adjacent 113-room Hampton Inn, both part of the Hilton chain.
Mr. Hogan sees the hotels drawing business from the new Children's Hospital in nearby Lawrenceville, which he said could attract up to 100,000 visitors a year, as well as UPMC Shadyside and the Hillman Cancer Center, where UPMC is mulling a possible 300,000-square-foot expansion.
In addition, Chatham University last spring acquired an office building at Fifth and Penn avenues near East Liberty that will house several graduate programs. The University of Pittsburgh and Carnegie Mellon University also could provide a base, Mr. Hogan said, particularly given that land for new hotel development in Oakland is scarce.
In studies conducted a couple of years ago, East Liberty Development found that between the medical institutions and universities, the area could support more than 400 new hotel rooms. Mr. Hogan noted that the only hotel now in the area is a 132-room Courtyard by Marriott across from UPMC Shadyside.
There's also potential, he believes, for the hotels to serve Downtown, particularly the convention center area, via the East Busway and a new transit portal in the works. And none of that counts the blossoming commercial development taking place in the neighborhood.
"We're optimally placed within the region's market to really seize that opportunity," he said of the hotel developments.
Cindy A. Murphy, vice president of operations for InterContinental Hotels Group, which will operate the Hotel Indigo, said the company was aware that other hotels were in the works in the same area when it committed to the development.
She said that is not a problem because the three attract different customers. Hotel Indigo is more upscale, in the $140 to $150 a night price range, while Homewood Suites is geared toward those staying more than a couple of days. The Hampton Inn is a mid-priced alternative to Hotel Indigo.
Ms. Murphy said InterContinental did its own feasibility studies to determine demand before committing. The company sees East Liberty as an up-and-coming neighborhood that will be very attractive to visitors by the time Hotel Indigo opens in May 2010.
Still, David Sangree, president of Hotel & Leisure Advisors, a hospitality consultant, said that the 358 rooms proposed between the three hotels "is a lot of rooms in a neighborhood like that." He said much may depend on the demand generated by the nearby medical centers and universities.
Hotel & Leisure Advisors did a feasibility study in 2006 for a proposed hotel as part of the Bakery Square project at the former Nabisco plant bordering East Liberty and "in general we thought there was demand," Mr. Sangree said. Whether the hotel would be financially viable depended in large part on the cost of construction, he said.
The three East Liberty hotels, plus one planned at Bakery Square and another proposed for the old Don Allen Auto City site on nearby Baum Boulevard could push total rooms close to or above the maximum 450 pinpointed in marketing studies.
That, said Denis Rudd, professor of hospitality and tourism management at Robert Morris University, "could be a little dangerous."
"I certainly wouldn't want to build to the upper limits," he said.
"I don't think it's eyebrow raising. I hope they did their homework, that's all. If they did the background, they'll be fine. I think it will help the community."
Mark Belko can be reached at mbelko at post-gazette.com or 412-263-1262.
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