Local hotel developer Winwood Hospitality Group has bought another part of downtown Raleigh.
The company has spent $6 million to buy the Firestone garage property near Nash Square, where it plans to eventually build a hotel. Though, the timing on when the company plans to build there is undetermined, said Amit Patel, Winwood’s president.
“The long term use (of the property) is going to be hospitality,” Patel said, adding that the company hasn’t made any commitments on what type of hotel they would build. “There are six announced hotels in downtown Raleigh right now — including one of our own — and our intent is to see how they are absorbed and then bring product to the market.”
This is the company’s second purchase in downtown in recent years. Previously, the company bought property adjacent to the Raleigh Convention Center, where it said in 2017, it would build a 12-story Courtyard Marriott hotel, The News & Observer previously reported.
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Winwood hopes to begin construction on that site, which would add nearly 200 rooms to downtown, sometime near the end of 2019, Patel said.
Patel added that his company has the patience and resources to wait and watch the market before embarking on the Firestone Property. Winwood bought the property at 333 S. Dawson St. from Bridgestone Americas. The purchase was first reported by the Triangle Business Journal.
The Firestone building and its vintage sign is a familiar landmark to many in downtown Raleigh, dating back to the 1960s. The area where it’s located, near Nash Square, has become increasingly popular with developers in recent time, due to its walkability to the downtown core as well as Union Station and the Warehouse District. Another hotel developer, recently announced plans to build a nine-story hotel at southwest corner of West Martin and South Dawson streets, and the former News & Observer building on Nash Square fetched $22 million.
The city of Raleigh also wants to transform its current City Hall campus on Nash Square into a 20-story tower as well.
Under the terms of the sale, Firestone will sign a short-term lease, but will eventually move out, Patel said. He wouldn’t say when Firestone would be moving out, but added that after it does, the company will look to sign another tenant, while it studies the market.
In the past year, tourism and downtown advocacy groups have increased their calls for more hotels to be built in downtown. Greater Raleigh Convention and Visitors Bureau said recently it wants the city to study how it can attract developers to build more rooms near the convention center. The Downtown Raleigh Alliance has agreed with the visitors bureau on the issue.
“We are glad to see new hotel projects moving forward, which can help satisfy growing business, convention and tourism travel to downtown and bring new types of hotels into the market,” said Bill King, who runs economic development and planning for the Downtown Raleigh Alliance. “Ultimately, to elevate the convention center into competing for even larger events and to satisfy business travel for our growing employment base, we would like to also see a large headquarters hotel of 400-plus rooms come into downtown.”
But currently, Patel is not sure if downtown Raleigh can support the number of rooms that have been announced.
“Downtown Raleigh has tremendous momentum right now,” Patel said. “But we chase numbers and currently there is tremendous weekend demand, but corporate (demand) is still in the suburbs and (Research Triangle Park).
“We do see that changing long term with companies like Citrix and Red Hat growing, and hopefully some other companies will be announced in the future. But currently the numbers don’t support the influx of rooms at the moment.”