Hotel developer Sam Chang plans to build six hotels on a gritty stretch of West 39th Street within sight of the Lincoln Tunnel.
It’s an ambitious undertaking that real estate experts say may be unprecedented in New York City. And it will likely transform the landscape of a single block, now home to a desolate parking lot and drab office buildings, just off Eighth Avenue.
“This block now is not the most upstanding street in New York City,” concedes architect Gene Kaufman, who is designing all six hotels. “We are going to be able to improve the neighborhood.”
The hotels will range in height from 31 to 37 stories. The highest building in the area right now is 20 stories. There are currently no hotels — and usually no tourists — in the immediate vicinity.
Chang says most of the hotels will be franchises of varying price and quality. At the low end is an 80-room budget Comfort Inn, at 305 West 39th Street, which will cost about $15 million to construct and offer rooms for about $150 a night. Across the pricing spectrum, there’s a four-star, $110 million, extended stay Homewood Suites (a Hilton brand), at 311 West 39th Street. The Homewood Suites will rent rooms for $275 a night and offer a 4,000-square-foot library and sitting area.
The other hotels on the block will likely be a Hampton Inn at 337 West 39th Street, a Candlewood Suites at 339 West 39th Street, and a Holiday Inn Express at 343 West 39th Street. Those three properties will be connected, and each will have 200 rooms, creating a total of 250,000 square feet. Construction costs are estimated at $150 million.
Chang is also building a full-service Holiday Inn at 588 Eighth Avenue.
Sean Hennessey, chief executive of Lodging Investment Advisors, says Chang’s project is nearly unprecedented in New York. The only example he could cite of one developer owning multiple competing properties next to one another was the Essex House on Central Park South, which offered accommodations in a Weston on lower floors and in the more expensive St. Regis on the floors above.
“They were able to get higher room rates for the St. Regis than they would have been able to get had they just had the Weston,” he said.
Suburban developers sometimes buy large blocks of property and break them up into separate hotels, Hennessey added. The owners can then launch separate marketing themes, while cutting facility costs by sharing the reservation systems, gyms and pools.
But Chang says he has no such plans — though he says he is saving about 20 percent on construction costs on three of the properties, because they are adjacent.
“We started building the Comfort Inn, and the owners of 343 [West 39th Street] approached us and asked if we wanted to buy” the three adjacent properties, says Chang. After we bought from them, the owners of 311 [West 39th Street] and 585 Eighth Avenue approached us. Maybe we will call this ‘Hotel Street.'”
Chang expects to finish the Hampton Inn by June 2007, the Holiday Inn by July 2008, and everything else in between.
“Some of them I will keep, some of them I will sell,” Chang says. “I have opened 25 hotels in New York. What is there to be excited about? It’s like eating dinner. Every day you have to do it.”