Courtesy of the Pittsburgh Post-Gazette
One of Downtown’s oldest and most ornate skyscrapers could be the site of the city’s latest hotel development.
New Orleans-based HRI Properties has plans to convert the 18-story Arrott Building at 401 Wood St. into a boutique hotel.
HRI, under the name Urban Pittsburgh Downtown Hotel Company LLC, acquired the real estate from Batra Hospitality Group Inc. last September, according to Allegheny County real estate records.
The building — constructed in 1902 by noted architect Frederick J. Osterling, who also designed the historic Union Trust Building on Grant Street — has housed offices for its entire life. It is now empty.
A Subway sandwich shop that occupied a street level spot in the building for 26 years closed on Christmas Day.
The city issued a building permit to Urban Pittsburgh Downtown Hotel Company last month for interior non-structural demolition work apparently related to the proposed conversion.
Michael Coolidge, HRI’s chief investment and development officer, said Wednesday plans for the building are still being finalized “but the current thought is to convert it to a lifestyle boutique hotel.” The company is considering 120 to 130 rooms.
The acquisition is the first for the real estate company in Pittsburgh. Mr. Coolidge said HRI has had its eye on the market for several years.
“It’s just a great opportunity to add a property that would make a fabulous hotel in the Pittsburgh market,” he said.
HRI likes the proximity to many of Downtown’s top office buildings, Point Park University, and other demand generators, he said.
Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation, said he has met with HRI and supports the plans for a hotel.
He called the Arrott Building, which the foundation has designated as a local historical landmark, a “very significant building” in a block where the organization has invested millions of dollars restoring facades and properties and adding street-level retail.
“We sure like the idea,” he said. “We have a big investment there and we think this highly ornamental building inside and out is another anchor.”
The HRI plan would bring another hotel into a downtown that already is brimming with them — with more in the works.
A 160-room Even Hotel is being built in the former Macy’s/Kaufmann’s department store on Smithfield Street. A seven-story, 97-room Fairfield Inn and Suites hotel is being completed on Fort Pitt Boulevard.
The Davis Companies, a Boston-based developer, is considering a luxury hotel as part of its plans for a major mixed use development at Ninth Street and Penn Avenue that also involves the Pittsburgh Parking Authority and the Pittsburgh Cultural Trust.
Those projects are in addition to the hotels that have opened the last few years Downtown, including Hotel Monaco, the Drury Inn and Suites, the Embassy Suites, the Hilton Garden Inn, and the Distrikt Hotel.
According to the Pittsburgh Downtown Partnership, there were 4,393 hotel rooms in the Golden Triangle as of November.
All of that building is having an impact on occupancy and rates.
Reports provided by STR, a Tennessee-based data and analytics specialist, show that hotel occupancy Downtown peaked at 70.3 percent in 2015 before falling to 66.3 percent in 2016 and last year. The average daily room rate reached $156.78 in 2015 but slipped to $150.07 in 2017.
“We’re watching the new growth closely and what effect it’s going to have on supply and demand,” said Craig Davis, president and CEO of VisitPittsburgh, the local tourism agency.
Mr. Davis said there have been some encouraging signs. Demand outpaced supply in eight of the 12 months in 2017. The occupancy rate for luxury hotels Downtown increased from 65.5 percent in 2016 to 66.4 percent last year, he said, although the average room rate was slightly down at $160.83 versus $163.99 in 2016.
Last year also saw an increase in supply of less than one percent versus 18.9 percent in 2016, Mr. Davis noted.
He welcomed the proposed development in the Arrott Building.
“We’re pleased that our city is being viewed as a positive location for new business development and we think a hotel like this will be well received by our visitors,” he said.
The Arrott Building houses an ornate lobby with a staircase, ornamental bronze, and marble. The top of the building features columns, lion’s heads, and other elaborate and intricate architecture.
Mr. Coolidge said HRI plans to keep the “relevant historic fabric” in the lobby. The outside will remain the same, with some repair work scheduled. HRI hopes to begin construction in late summer. The building is part of the Fourth Avenue historic district.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.