New Castle County was not to be denied when it came to the former Sheraton South hotel in the New Castle area.
A release from commercial real estate broker JLL indicated that interest was strong for the property sometimes known as the “Swamp hotel,” thanks to its marshy surroundings.
“The sale represents a unique opportunity for New Castle County to acquire a newly renovated, institutional hotel of scale,” JLL Director Stephen VanLeer stated. “The entire process totaled 12 weeks and received remarkable interest from a host of hotel and alternative investors. With the help of HHM, the hotel will be repurposed and operated as a shelter to support the County’s homeless population.”
HHM is affiliated with the seller Hersha Hospitality Trust and agreed to manage the center.
The property sold for an impressive $19.5 million and was quickly converted into the Hope Center, an option for the county’s growing population of homeless. Online bidding on the property started more than $7 million.
The area lodging industry has mixed feelings about the sale. The deal subtracts 175 rooms from a struggling market. There are questions that the fast track nature of the project did not allow local operators to bid for management services.
Also worth considering were the other bidders who saw potential in a hotel, that would have remained on the tax rolls. Losing bidders may have been betting on a travel boom that could come as more people are vaccinated.
So far, the county has not responded to a couple of requests for comment on the management agreement.
County Executive Matt Meyer, who championed the project, followed a trend by other locales to snap up hotel properties as a way to provide safer conditions for the homeless, a laudable goal that was allowed under CARES Act funding that paid for the property
Meyer held a Facebook Live event yesterday that took questions from the public on a project that proceeded with warp speed by government standards.
The process led some to believe the hotel was purchased with property tax revenues. Others praised the county for dealing with a worsening situation for a growing number of residents.
Enjoy your day. Looks like we may have some clear skies. Whoops, looks like we are seeing more clouds.- Doug Rainey, chief content officer.