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bobliocatt

Downtown Adam's Mark Hotel sold to Marriott

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bobliocatt    0

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Adam's Mark likely to become Marriott

By CHRISTOPHER CALNAN and GREGORY RICHARDS

The Times-Union

Marriott International Inc. reached an agreement last week to buy the downtown Adam's Mark hotel, the region's largest, Adam's Mark confirmed Tuesday.

But the 966-room hotel is not yet sold and will continue operating as an Adam's Mark, general manager Ben Soto said.

Marriott still needs to perform its due diligence by examining the property -- much like a home buyer would -- and its finances. Soto estimated that would take about 45 days. Then, a closing may take place.

The agreement was signed May 21.

Roger Connor, spokesman for Bethesda, Md.-based Marriott, declined to comment on the matter.

News of the probable sale comes after Fred Kummer, owner of HBE Corp., the parent company of Adam's Mark, reaffirmed in March that he would not sell his "big" hotels, including the one in Jacksonville. In January, when St. Louis-based HBE sold eight hotels, including one in Daytona Beach, Kummer also said he would keep the Adam's Mark brand in Jacksonville.

Soto said he wasn't sure why Kummer had decided to sell the Jacksonville hotel.

"He was going to hold onto it, but I guess [Marriott] must have made an offer that he found appealing," Soto said.

Contracts have also been signed to sell three other Adam's Mark hotels, those in Tulsa, Okla.; Kansas City, Mo.; and Mobile, Ala., Soto said. Marriott was not acquiring those properties, Soto said. Instead, he believed that two other hotel chains were, though he was unsure which.

Kummer couldn't be reached for comment Tuesday. Other HBE officials either couldn't be reached Tuesday or declined comment.

The $120 million hotel opened in February 2001 with a public incentive package worth more than $21 million, including a $13 million construction loan from the city. It's scheduled to be the National Football League's headquarters during Super Bowl XXXIX in February.

Jim Steeg, the NFL's senior vice president for special events, could not be reached for comment Tuesday night. Nor could Jacksonville Super Bowl Host Committee spokeswoman Heather Surface.

Gary Andreas, a principal in Tellatin Andreas & Short, a St. Louis-based hospitality industry consultancy, said HBE is selling off its under-performing hotel division, leaving the parent company with its core business of building hospitals and banks.

The only exception may be the Adam's Mark in HBE's hometown of St. Louis, Andreas said.

"I would imagine everything else is for sale," he said. The hotels' "performance, system-wide in the last two, three years has just bottomed out. I would say it will eventually come to the point where St. Louis would have the only Adam's Mark."

If the four sales go through, the Adam's Mark chain will be reduced to seven hotels. It recently had 21 hotels.

Bookings at the Adam's Mark have improved: Last year's occupancy rate was 40 percent, while it has reached about 55 percent so far this year, Soto said.

Occupancy rates in the 70 percent range are generally considered good.

The downtown landmark has also seen a steady rotation of general managers. Soto, who assumed the general manager role in January, is the seventh person to do so since the property opened for business in 2001.

Soto said he was unsure what flag the hotel would carry if Marriott closed the deal. Marriott owns several brands, including Marriott Hotels & Resorts, Renaissance Hotels & Resorts, Courtyard, Fairfield Inn and Ritz-Carlton.

Soto also said all contracts will continue to be honored with a change of ownership, including those for the Super Bowl.

"Business as usual is how we're operating, and it won't impact anybody who has a contract with us," he said.

Soto said it's not common for many workers to lose their jobs when a hotel changes hands. But he said he doesn't know of Marriott's potential plans.

In 2002, the Adam's Mark was $340,612 short of its roughly $1 million debt payment to the city, according to data from the Jacksonville Economic Development Commission. Overall, the hotel's account was short $1.1 million at the end of July 2003. It's unclear how much, if any, of the money has been paid on the hotel's account.

The agreement between HBE and the JEDC called for the money to be repaid two ways: through a 1 percent surcharge tacked onto room rates and by allocating the county's portion of the property tax revenue to pay off the loan.

Charles "Bucky" Clarkson, a local developer who opposed construction of the Adam's Mark because it conflicted with his own plans for a proposed downtown hotel, said the deal will benefit downtown businesses and beyond with the ripple effect that would accompany higher occupancy rates.

"It's good news, it's very good news," he said. "The Adam's Mark as a brand is a negative brand. Marriott is one of the best hotel operators around."

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wolfdawg54    0

I was actually looking to post on this, but I guess you beat me to it. Well, I believe that this will help Jacksonville by bringing in a larger, well-known hotel chain than to keep the Adam's Mark. More people will recognize the Marriott name than Adam's Mark and will likely attract more visitors.

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lol, Lakelander beats me to new posts all the time. I think I might have contributed one article since I joined. But thanks for the news anyways! I don't think to many changes will be made, just the name.

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bobliocatt    0

My bad, I normally check jacksonville.com in the morning and post anything worth reading before I go to work. Everynow and then I check the Jax Daily Record, the Jax Business Journal and Downtown this Week online sites.

I don't think the name change will do to much, but its a good thing to see companies continue to have an interest in downtown properties and development.

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bobliocatt    0

Marriott is high-profile marketer

The sale of the downtown Adam's Mark hotel to Marriott International Inc. would mean more than just a name change.

It would mean more advertising power from a larger hotel chain, and that advertising would naturally feature Jacksonville to potential visitors, industry observers and city officials said Wednesday. Marriott is about 20 times larger than Adam's Mark was at its peak.

Marriott also has the industry's best marketing department, said Kitty Ratcliffe, president of the Jacksonville & the Beaches Convention and Visitors Bureau.

"This is a group hotel and with the very strong national sales network Marriott has, that will serve Jacksonville very well," she said. "As they market the Marriott name and identify which properties certain customers can fit into, Jacksonville will be one of the large convention hotels that would be considered when they look at first- and second-tier cities."

Gary Andreas, a principal in Tellatin Andreas & Short, a St. Louis-based hospitality industry consultancy, agreed.

"Obviously, they have a larger marketing department," he said.

Group business accounts for about 50 percent of the revenue at hotels such as the Adam's Mark, Andreas said.

Marriott reached an agreement last week to buy the 966-room Jacksonville hotel. The deal is expected to close in about 45 days, an Adam's Mark official said Tuesday.

Roger Conner, spokesman for Bethesda, Md.-based Marriott, didn't return telephone messages seeking comment Wednesday. Fred Kummer, owner of Adam's Mark's parent company, HBE Corp., was traveling Wednesday and couldn't be reached for comment.

Marriott owns 415 hotels; Adam's Mark, which once owned 21 hotels, will operate seven if the recent sale of four properties goes through, according to Andreas.

Marriott probably has ambitious plans for the Adam's Mark property, he said.

"Marriott wouldn't have bought that property if they didn't think they could run a first-class property and be the market leader," he said. "It will prove to be a very successful operation."

The ownership change may prove to be fortunate for the city as the hotel is preparing to be the National Football League's headquarters during Super Bowl XXXIX in February.

Jim Steeg, the NFL's senior vice president for special events, expects Marriott to bring in its more experienced managers to work at the hotel through the Super Bowl.

Marriott did that in 1988 when it bought a San Diego hotel that was the Super Bowl headquarters three months before the game.

"I think the key element was Marriott could summon their resources into that hotel to assist the staff that will already be assigned to work there," he said. "They have done this before as have other Super Bowl headquarters properties.

"I'm sure that will be part of the plan now if the purchase goes through within 45 days as expected. In Adam's Mark's case, you didn't have that many people you could bring in because they didn't have that many hotels."

It's likely the hotel will play an important role in the impression Jacksonville gives thousands of members of the media who will be visiting the city for the game.

"This property is going to be the cornerstone of everything that goes on at the Super Bowl," Steeg said.

The $120 million Adam's Mark opened in February 2001 with a public incentive package worth more than $21 million, including a $13 million construction loan from the city that's repaid through a 1 percent surcharge and property tax revenue.

To date, the hotel's debt payment is short $1.89 million, according to the Jacksonville Economic Development Commission. Any unpaid balance remaining at the end of the 20-year loan would be paid off by maintaining the surcharge, the JEDC said.

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