8-story hotel could bring big changes to downtown Chapel Hill’s Franklin Street
A Wisconsin developer wants to build a hotel on West Franklin Street in downtown Chapel Hill that could be six stories taller than surrounding homes and businesses.
The proposed hotel at 505 W. Franklin St. would be one of the first North Carolina locations for Raymond Management Co., a Wisconsin-based, family-owned developer and operator with 35 hotels in 12 states.
The company also has proposed building the nine-story Nash Square Hotel and restaurant at the corner of Martin and South Dawson streets in downtown Raleigh. The Raymond Group, which owns Raymond Management Co., bought the property in December 2018.
The company’s existing brands include Hilton Garden Inn, Hampton Inn and Home 2 Suites by Hilton, some of which Raymond Management Co. also manages day-to-day and others managed in partnership with the North Central Group, also based in Wisconsin.
The concept plan submitted to the town shows a hotel with up to eight stories at its core on the 0.8-acre site at the corner of West Franklin and South Graham streets, across the street from Al’s Burger Shack.
An existing two-story brick building that has housed the former Chapel Hill News, 3 Birds and the Top of the Hill distillery would be demolished. TOPO Distillery owner Scott Maitland, who has owned the building since 2009, said Monday he is still looking for a new distillery location.
Proposed West Franklin Street hotel details
The hotel, as proposed, could have between 140 and 180 rooms and an enclosed parking deck or off-site parking developed with the town. Drivers would enter the deck on South Graham Street.
Storefront and outdoor patios and terraces along both streets are proposed, the plan notes.
The land is currently zoned TC-2, which allows buildings up to 90 feet tall, but the project is designed to comply with the town’s future land-use map, which is being developed now.
That plan for how the town might grow through 2049 would allow buildings of up to eight and 10 stories at their core on both sides of West Franklin Street, similar to what has been developed at 140 West Franklin and Carolina Square.
Most homes and businesses in that area are one and two stories tall, although the nearby 10-story Greenbridge condominiums are 10 stories and it is possible that taller buildings could replace the county-owned buildings at 501 and 503 W. Franklin St. in the future. The county has agreed to lease those properties to health technology company Well Dot Inc. for its future expansion. The company opened its office in November at 419 W. Franklin St.
The plan for 505 W. Franklin St. notes the proposed hotel’s facade could step back 26 feet to 30 feet at the third story so that it doesn’t tower over surrounding properties.
The town’s Community Design Commission and the Town Council review concept plans and offer feedback that the developer can use to revise the project before submitting an official application. Those reviews have not been scheduled.
“Our goal is to introduce the project team, our preliminary design and solicit feedback for how the CDC may view development in this location along Franklin Street in downtown Chapel Hill,” the application stated.
Can downtown Chapel Hill, Carrboro support more hotels?
The town already is considering another hotel. Smart Hotels has proposed building a 140-room hotel on land near the corner of West Rosemary and North Columbia streets.
It would join four existing hotels in downtown Chapel Hill, including the AC Hotel by Marriott on West Rosemary Street. In Carrboro, the Atma Hotel Group-operated Hampton Inn and Suites is located less than half a mile west of 505 W. Franklin St.
The issue of hotel growth has been on Chapel Hill’s agenda for a few years, including a recent discussion of how the growing short-term rentals market, such as AirBnB, is affecting supply and demand and how the town might regulate short-term lodgings.
The COVID-19 outbreak delayed that conversation and has hit the nation’s hotels and short-term rentals especially hard.
National Public Radio reported April 28 that AirDNA, which tracks Airbnb listings, showed a $1.5 billion loss in the previous month. Nearly 80% of the nation’s hotel rooms were empty, NPR reported.
Orange County expects to lose at least 16% of its local occupancy tax revenues as a result of the coronavirus shutdown. The county’s 3% occupancy tax brought in nearly $1.7 million for the Chapel Hill/Orange County Visitors Bureau in 2018-19, according to a December report.
Hotel occupancy rates were up 3.1% last year after falling between in 2018, the visitors bureau reported. The supply of local hotel rooms grew 1.1% last year, while the demand for hotel rooms grew 4.2%, the report showed.
Raymond Management Co. officials cited a Smith Travel Research report that also showed an increased demand for hotel rooms in downtown Chapel Hill. The demand grew by an average of 5.5% in the past five years, according to that report.
This story was originally published May 11, 2020 at 1:56 PM.
