New inn is on the horizon

Published 9:00 pm Sunday, September 26, 2004

EVERETT – A Bellevue businessman plans to spend millions to renovate the city’s largest hotel, with hopes of reopening it under a new name by next summer.

Tommy Lu bought the former Howard Johnson Plaza at 3105 Pine St. in a $5.6 million transaction that closed last week. The purchase price was well below the property’s assessed value of $6.7 million, according to Snohomish County records.

The hotel, with nearly 250 rooms, closed a week ago after the sale was finalized. This week, fencing was put up around the property and signs were temporarily covered.

Lu, who also owns a hotel in Taiwan, is committed to vastly improving the Everett property, said John McCracken, a principal with Chambers Lodging. Lu has hired the Seattle-based hotel management firm to help him operate his new acquisition.

Together, they’ve already applied to the InterContinental Hotels Group for the right to operate under the Holiday Inn brand name. McCracken said the Everett hotel can succeed again once it’s refurbished.

“It’s something the city’s been wanting,” he said. “It makes sense now with the (Everett) Events Center and other renovations going on in Everett.”

Lu and Chambers are looking at a multimillion-dollar remodeling of the hotel, both inside and out. That includes replacing all the furniture, carpet, decor and kitchen equipment inside the building.

“There’s really going to be nothing in here except the structure itself,” McCracken said. “It will be a shell.”

An auction to sell off the old furniture and equipment is in the works, he added.

In addition to new fixtures, the split-level restaurant space may be reworked to put it on the same level. The convention halls and meetings rooms will be redone and have new lighting.

The new owner also is considering major architectural changes to the lobby and front entrance. Improvements to the indoor pool on the building’s south side are also possible, McCracken said.

New, more soundproof windows are planned for the rooms that face I-5 on the east side of the hotel. Other windows may also be replaced.

McCracken said he and Lu also have no illusions about the need to spruce up the exterior of the hotel, which was built in 1981. Though the seven-story, concrete building is structurally sound, it looks a little like a prison from the outside, McCracken said.

That can be changed, said Jeffrey Degen of Degen &Degen, a Seattle architectural and design firm that specializes in updating hotels. He has had preliminary talks with Lu and his representatives about the renovation, and Tacoma-based Merit Construction already has been hired to carry out the work.

“Undoubtedly, nine months from now, you won’t even know it’s the same building,” Degen said. “It will look quite like a new hotel when we’re done with it.”

While the planned improvements are extensive, Lu would like to have the hotel ready to reopen by May or June 2005, McCracken said.

While this is Lu’s first U.S. hotel property, he has wanted to invest in a hotel in this country for quite a while, McCracken said.

“There really aren’t a lot of full-service hotels on the market in the Seattle area,” he said.

Lu also owns Kent-based WAPAC LLC, a wholesaler of computer equipment, and a number of other commercial properties.

Karen Shaw, Everett’s director of economic development and human needs, said Lu seems sincere about his plans.

“That’s the vibe I’m getting. He has quality ideas and seems like the kind of partner who is excited to work with the city,” she said.

Shaw said in addition to bringing tourism revenue into the city, the hotel, when reopened, would likely employ 50 to 70 people.

Since 1981, the city’s largest and only full-service hotel has passed through the hands of several owners. With meeting rooms close to downtown Everett, the Howard Johnson Plaza remained a host for small conventions and other meetings even as the hotel’s look became shabby and outdated.

In recent years, the former owner, Pacific West, took legal action against the management company that leased the hotel and ran its day-to-day operations. That company, Seattle-based Northwest Lodging Inc., filed for Chapter 11 bankruptcy in the summer. The civil cases were settled earlier this year.

McCracken said he thought only half a dozen Northwest Lodging employees remained when the hotel was shut down. Northwest Lodging could not be reached for comment on exactly how many lost their jobs.

Even after the hotel opens with a new look, new furnishings and a changed name, McCracken said the owner has realistic expectations that business won’t boom right away.

“We know it will take time to get people back,” he said. “We look at 2005 for doing the renovation and getting it open the last half of the year. But it will take 2006 or 2007 to stabilize the business.”

On the other hand, demand from conventions and other groups may help bring back business faster, said Sandy Ward, executive director for the Snohomish County Tourism Bureau.

“Right now, we have a number of groups and conventions that would like to come to Everett. But they’re kind of on hold because the city’s only full-service hotel is closed,” Ward said.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.