Operator suggests new plan for Book-Cadillac

[Allan]

Operator suggests new plan for Book-Cadillac

Grand '20s hotel could become upscale Westin

April 9, 2004

BY JOHN GALLAGHER

FREE PRESS BUSINESS WRITER

Detroit's derelict Book-Cadillac Hotel would become an upscale Westin Hotel under the city's latest plan to rescue the vacant landmark.

Starwood Hotels & Resorts Worldwide Inc., the White Plains, N.Y.-based company that owns the Westin brand as well as Sheraton, W Hotels and others, said Thursday it is negotiating details with Ferchill Group, the Cleveland-based developer that Detroit Mayor Kwame Kilpatrick has touted as the new developer for the Book-Cadillac.

"Starwood is in discussions on the Book-Cadillac project but nothing has been finalized," Paul Sacco, a vice president for development, said in a statement. "We are excited about the prospect of growing with the city of Detroit and further cementing our relationship with the Ferchill Group."

Timm Judson, Ferchill's chief investment officer, would not confirm that Westin was being selected to operate the hotel. He said discussions with the city are continuing.

Westin operates a hotel at the Town Center in Southfield and at McNamara Terminal at Detroit Metro Airport. Known as an "upper upscale" brand, Westin last operated a hotel in downtown Detroit at Renaissance Center until General Motors Corp. bought the property and converted the hotel to a Marriott in 1998.

Opened in 1924 and closed in 1984, the Book-Cadillac has long been the focus of city efforts to renovate it. In July, Kilpatrick announced that Kimberly-Clark Corp. of Dallas had agreed to undertake a $150-million restoration of the Book in time for Super Bowl XL in February 2006.

But the Kimberly-Clark work had no sooner started than it stopped, a victim of a $30-million budget gap. The company formally abandoned the project in January, saying that construction costs loomed higher than expected, and the anticipated revenues were less than needed to ensure a profit.

Referring to the budget gap that scuttled the Kimberly-Clark deal, Judson said this week, "We're grappling with those numbers as they were." Asked if a deal were imminent, he added, "We're closer in some respects but not in some respects as we'd like."

Since it closed, the 28-story Book-Cadillac has deteriorated to the point of ruin. Everything of value has been stripped away, and water damage has collapsed ceilings and walls, to the point where walking though the dank, dark interior requires stepping over piles of debris.

Once the Kimberly-Clark work got under way last year, scaffolding went up along the Washington Boulevard face of the hotel to allow construction crews to begin interior cleaning. The city recently resumed that interior clean-up work, because some of it would have to be done for a renovation or for a demolition should the deal ultimately prove impossible.

The Book-Cadillac would have become a Marriott hotel under the Kimberly-Clark plan. Typically, a developer or investment group owns a hotel and hires an operating company, such as Westin or Marriott, to run it.

Construction industry insiders say it's still possible to finish a Book-Cadillac restoration in time for Super Bowl XL.

Contact JOHN GALLAGHER at 313-222-5173 or [email protected].