Lexington's 21c hotel delayed to 2015, but 'definitely not dead'

First National Building, Main St. and Upper St. which will be the new 21c hotel in Lexington, Ky., on Aug. 27, 2013. Photo by Pablo Alcala | Staff
First National Building, Main St. and Upper St. which will be the new 21c hotel in Lexington, Ky., on Aug. 27, 2013. Photo by Pablo Alcala | Staff Lexington Herald-Leader

Lexington's 21c Museum Hotel will take longer and cost more than anticipated, but it is coming, executives say.

Company founder and CEO Steve Wilson said in an interview with the Herald-Leader that the boutique hotel planned for downtown has been delayed but is "definitely not dead."

Wilson and his wife, Laura Lee Brown, Louisville art collectors and philanthropists, bought the historic First National Bank building and a smaller adjoining structure at Main and Upper streets last year. They received approval from the city last year for design plans.

The office tenants are out, but renovation has been delayed by unforeseen challenges, Wilson said.

Construction on the $40.5 million project should begin sometime in the next four months, with the hotel now scheduled to open in 2015, said Craig Greenberg, 21c president.

"Urban development and historic redevelopment projects often take longer than expected, and we don't want to compromise on the quality of the 21c experience here in Lexington," Greenberg said. "But there have been some surprises."

Chiefly, "water intrusion in the basement that we didn't know about," Greenberg said.

The building also will need "a significant amount of environmental remediation," he said of substances including asbestos. Also, the multiple buildings of the site have floors at different levels, complicating how to merge them into one cohesive space.

Those problems have boosted the cost of the project to $40.5 million from about $37 million, he said.

"That's more than originally expected, and that's part of the challenge," Greenberg said. "We have asked the city to help with some of our unforeseen infrastructure issues and water intrusion issues. We do need a little more help."

"We expect some more surprises," Wilson said.

The Lexington Downtown Development Authority's president, Jeff Fugate, said that no formal request has yet been received but that 21c representatives met with city engineers and stormwater experts to determine what might need to be done.

"There are probably pipes down there that Henry Clay used," Fugate joked about the circa 1912 building. But the surprises in renovating old buildings are part of the fun, he said. "If it was easy, everybody would do it. But this will be something remarkable, transformative. Timeless."

'The Calumet Farm of our downtown'

Mayor Jim Gray, whose background is in construction, said delays of this kind are expected with old buildings.

But the city remains committed to bringing 21c to Lexington.

"It brings good jobs — career jobs — with a growing brand," said Gray, who is also an avid art collector. "But it also has a viral effect, energizing and stimulating other jobs, and brings marquee status to our city. ... The city gets not just beds and a restaurant but a real art museum — with a collection that is curated. And it restores a landmark on our skyline that otherwise would be crumbling."

Gray compared preserving the First National Bank building, designed by McKim, Mead & White as the city's first "skyscraper," to saving Calumet Farm, the once-bankrupt historic horse farm that was threatened with development.

"It's the Calumet Farm of our downtown, Gray said. "A project like this is part of your cultural infrastructure. This touches history ... yet brings us into the contemporary world."

Loads of laurels

The Louisville-based hotel company has won accolades for its hotels, dining and business savvy.

With $4.6 million in revenue in 2012, 21c Museum Hotels was recently named to Inc. magazine's "Inc. 5000," an annual ranking of America's fastest-growing companies across 22 industries.

The hotels have been top ranked in Conde Nast Traveler Reader's Choice Awards; the 21c in Bentonville, Ark., was named to Travel + Leisure's "It List of Coolest Hotels for 2013"; and Metropole, 21c's Cincinnati restaurant, was named to Bon Appetit magazine's list of Top 50 New Restaurants in 2013.

The 21c hotels are designed by New York architect Deborah Berke and showcase works from Wilson's and Brown's extensive contemporary art collection.

Diverse set of investors

Wilson and Brown have invested $5 million in the project already, Greenberg said, and have secured a loan from Central Bank of at least $14 million to finance construction costs.

The city of Lexington and the state also have committed federal and state money, including $9 million in state tax incentives over a decade, a $6 million loan from the city using federal Housing and Urban Development money, a separate $1 million loan from the city, and $5.8 million in tax-increment financing.

Several local investors also are partnering in the project, Wilson said; he did not disclose who has invested.

But design on the project is moving forward, Greenberg said.

'Very challenging'

The 101-year-old building at the heart of the project will be "very challenging," Greenberg said. Renovating 15 stories of offices to turn them into about 90 modern hotel rooms, with a "21c Suite" on the top, will mean building an external service elevator.

But it is worth the trouble, Wilson said.

"The character of the building is going to define it," he said. "That tall narrow building will be very different from the others we've worked in."

Currently, the building is empty and renovation has not begun. Inside are remnants of the offices that it housed for decades. But there are intriguing glimpses of the possibilities: the city view from the roof that will become a penthouse terrace; the soaring arched windows of the 14th floor; the high ceilings over the original bank lobby corner that will become the best seats in the new restaurant.

The number of hotel rooms per floor will vary, with a select number on the 15th floor alongside the 21c Suite.

More 21c's coming

The first 21c Museum Hotel, accented with its signature red penguin sculptures by the Cracking Art Group in Italy, opened in Louisville in 2006. Since then, others have opened in Cincinnati (with yellow penguins) and Bentonville, Ark. (green), and one is under construction in Durham, N.C. (color undecided).

More will be coming.

"Someday there will be six hotels, then 10 hotels," Wilson said. "I'd love to do one in Havana."

In Lexington, where the penguins will be blue, fitting in everything from an art gallery and meeting room space to a headline-grabbing restaurant is taking considerable planning, particularly because adjacent buildings have floors on different levels.

"We toyed with what we can do without," Wilson said. "But Lexington is home, and we didn't want anyone to walk into this 21c and be disappointed."

He said that key elements of the design remain, with the restaurant on the corner of Main and Upper streets.

"We want people to be able to see into it," he said. "We want it to be a gathering place before and after all the games and the races."

The style will be "comfortable, casually elegant. Not a fine tablecloth place but really good food."

There likely will be a communal table near the kitchen, which is planned to be on the annex behind the main building.

The chef and the hotel manager will be the first hires and likely will be named soon, Wilson said.

As in the 21c hotels in Louisville and Cincinnati, the restaurant will be its own entity, with a high profile.

The hotel will not be pretentious, Wilson said: "No gilt mirrors."

Despite the pared-down aesthetic, it will be luxurious, with top-flight service, bedding and amenities; there will be light in all the right places, Wilson said.

There might be polished concrete floors or a chandelier of scissors, he said.

Constantly updated displays of modern art will be in the mix.

"The art brings people there," Wilson said, "but the hospitality keeps bringing them back."

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