Jim Newberry

On Monday we covered part 1 of the Bait & Switch, outlining how the Webbs obviously never really tried to find funding for the boutique hotel Jeanne Gang designed and the Webbs pretended to be interested in.

Today, let’s take a look at another part of the Webbs strange play-calling. As Ms. Fortune reported:

Gang’s vision for the CentrePointe block included a boutique hotel. Webb said he and Gang both talked with the owners of 21C Museum Hotel in Louisville, trying to recruit them to open a hotel in Lexington.

“When that didn’t work, … we went back to our original design for a convention hotel, which is much larger,” he said. Webb said the hotel would be a J.W. Marriott. “The design with the bundles wouldn’t work.”

Asked whether Gang was given an opportunity to design a larger hotel, Webb said that Marriott “only deals with architects who have done convention hotels in the past, so consequently, we were at a dead end on that one.”

1. After asking one group to finance the boutique, the Webbs threw their hands up and reverted to the convention design.

2. The Webbs then went back to Marriott.

3. Marriott only deals with architects who’ve done convention hotels in the past.

First of all, as we outlined Monday, there are plenty of other sources for funding a boutique hotel designed by a world class architect at the top of her game. Let’s revisit this quickly.

The Webbs claim they asked 21C and then gave up and went back to Marriott, as if that was the only option. Not only was 21C not the only option… but when the Webbs went back to Marriott, there was absolutely no reason to go back to the chain with the convention hotel and not with the boutique.

Marriott has an entire line of boutique hotels. From the Marriott website:

The stylish and distinctive ambiance of boutique hotels is one of the undeniable luxuries of travel, and in that realm Marriott International, Inc. is among the leaders. Our global collection of boutique-inspired hotels pay incredible attention to the details of traveling well and create a unique, urbane atmosphere with an eye on local character.

In all, Marriott has 18 “brands” — types of hotels, from the “Courtyard by Marriott” (a glorified Days Inn) line to the Ritz Carlton company. Of those 18, three of their brands — three specialize in the increasingly popular “boutique experience.”

		Travel should be inspiring. With over 145 Renaissance Hotels world-wide, you’ll find inspiration at every location. Choose from one of our historic icons, chic boutiques or luxurious resorts. Each offers it own personality, local flavor, distinctive style and charm. All will stimulate your appetite for discovery.
		This is the latest edition of luxury boutique hotels and the perfect combination of energetic atmosphere, attitude and style. Each property is distinctive and designed by award-winning hotelier Ian Schrager.
		The Autograph Collection is a diverse collection of high-personality independent hotels. It plugs you into fresh, inventive and positively unique experiences only an independent can deliver.

But the Webbs don’t seem to have pursued any of these Marriott brands. Instead, they pretend that Marriott doesn’t do boutiques (and that no one other than 21C would do) and they pretend that when 21C said no, they were forced to revert to the convention hotel and get Marriott back on board.

But what Dudley actually said is that they reverted to the convention hotel and went back to J.W. Marriott. That’s one of Marriott International’s other brands and it is the brand that still adorns the “COMING SOON” sign that’s stood sadly on the CentrePointe block for three years, displaying a now three-times outdated version of the Webb architectural greatness.

Most elegant and luxurious Marriott brand Provides business and leisure travelers a deluxe level of comfort and personal service on their terms 39 JW Marriott Hotels worldwide; 16 US, 23 international

Some may wish to make the argument that the Marriott’s boutique brands weren’t a good fit — that Marriott would never go for it — because Marriott’s boutiques are only in big cities like the Renaissance in Times Square, a block away from the gigantic Marriott Marquis (which features a fun elevator ride, the only revolving restaurant in Manhattan, not very good views and $8 gin and tonics, two of which will get you a full revolution). That’s a fine argument. The hotel market is down and building luxury accommodations of any size in a place like Lexington offers significant hurdles. But this argument ignores the fact that there are only 16 J.W. Marriott’s in the US — the most elegant and luxurious brand. The closest Lexington gets to any of those locations is Indianapolis or Grand Rapids. The first is a more major city and the second is home to major American companies from furniture manufactures to Meijer to GE Aviation. Which again is not to say Lexington can’t be the 17th city, but that it’s silly to claim Marriott’s boutique brands couldn’t also call Lexington home, and in a worldclass designed Jeanne Gang building.

Now, to the fact that Dudley Webb says the phantom hotel will be a J.W. Marriott. Some have noted that because the J.W. logo is still on the sign, and that Webb is going back to it, that this means Marriott supports the building. And that may be true (and it may also be true that the Webbs don’t have the money to replace their hilariously dated “Coming Soon” sign).

But Marriott putting its name on a sign only takes you so far. Just as Webbs claim that a couple of banks have expressed interest in maybe funding an possibly eventual project, Marriott stands to lose nothing in this deal.

Marriott isn’t going to pay for the building. If somebody comes to them and says they want to build Marriott a $250 million hotel, Marriott — especially in this environment — isn’t going to say, “No.” The banks aren’t going to say “No,” either. They’re going to leave the door open because maybe, maybe, the deal will someday make sense.

It is certainly helpful to the Webbs to have Marriott’s name attached to their fantastical vision, but even if they are able to line up the financing, there’s no reason to think that Marriott won’t just back out and if they do, then the deal could fall apart and the supposed interested banks can back out. The only real losers are the Webbs.

So the Webbs are no closer to a deal than they were before the supposedly dead guy supposedly died.

And then there’s that last part.

Marriott “only deals with architects who have done convention hotels in the past, so consequently, we were at a dead end on that one.”

The Webbs have selected local firm EOP Architects as the new lead on their project. EOP was one of the six locals selected to build out Studio Gang’s vision for an individualized Main Street. Their hotel work includes the Gratz Park Hotel, the French Quarter Suites and the Hilton Garden all here in Lexington, as well as work on the Boone Tavern in Berea and a Hampton Inn in South Carolina.

Gratz Park is beautiful and the French Quarter is stunning. But it’s unclear which of these projects qualifies as “a convention hotel” — which Dudley claims is the prerequisite that disqualifies Studio Gang — and none rises to the size or scope of the J.W. Marriott brand. Which raises serious questions about Webb’s true intentions. (And this should in no way be construed as saying EOP can’t do the job or even that they are below it. As EOP has said, they are working to meld Gang’s ideas with Marriott’s needs and we should see there vision in a few weeks — hopefully it will be a great one, even if it’s undoable or if the Webbs, ultimately, pull the project away from them, too.)

So it’s unclear the Webbs actually sought funding for a boutique hotel, or if Jeanne Gang couldn’t have worked with Marriott if the Webbs had actually wanted such a thing, or if Marriott’s J.W. brand is any more realistic an option.

And, going further, it seems Marriott’s J.W. brand is actually unrealistic.

Here’s what Marriott’s “Hotel Development” site tells prospective builders and company shareholders:

Here’s what the Lexington market looks like, via the Distillery District’s TIF application (PDF):

And that same TIF application shows Lexington’s occupancy rate hovered around 61% from 2003 to 2008.

The J.W. Marriott brand carries a 71% occupancy rate with revenue per avaialble room at $143.34 — more than twice as much as Lexington’s market bears.

Which is a fact everyone but the Webbs seem to have known for years.

Over the past few months, the Webbs have tried to get real friendly. They tried to invest in good will. They tried to change their tune. They tried to do good, be open. They tried to listen. They tried to learn.

And it seems they’ve given up instead of continuing to pursue good.

A shame. There was so much promise. That was our only hope.

The Webbs dismissed Jeanne Gang, the architect who breathed the first sign of life into the Webbs’ dead block. Brought on at the suggestion of Mayor Gray, Gang revolutionized the Webbs worldview — or seemed to — opening up their process and their thinking, holding public meetings and welcoming in local architects, local thinking, local suggestions, local needs.

All that is over and we’re back to a cement block with no way to fund it.

Let’s pick apart what we know now from the fabulous Ms. Fortune’s report:

“She completed her work. She sent her final invoice, and it has been paid,” [Dudley] said. Webb could not recall the exact date but said that occurred several weeks ago.

Could not recall the exact date, huh? That’s funny. He never could recall the exact date. Every time his imaginary funding fell through either, his memory failed. When did the dead guy die? Not sure! When did the other mystery investors back out? Not sure! How long have you known about your lack of architectural talent? Not exactly sure.

Reached by phone Thursday night, Gang said, “I’m very disappointed. Dudley wanted to proceed without our involvement.”

Who’s the genius now? The woman who’s been named one or the developer who’d rather have a cement mixer design his building?

“Jeanne Gang’s inspiration resurrected the project in the hearts and minds of Lexington’s citizens, changing fear to hope,” [Mayor] Gray said in a statement.

“The city should ensure what’s done is consistent with her vision. This is the center of our city. The center of our economic future. It must not be compromised.”

What a difference a mayor makes! While the news from Dudley is, indeed, disappointing, the only way any of this could have happened is due to the work of Mayor Jim Gray. He opened up the dialogue, he got the Webbs to wake up — if only for a few months — and he guided them to an architect with vision.

The very notion that the city should “ensure” anything — quality, vision, transparency, etc. — was unimaginable under the old Mayor, and the old Mayor lost because of it.

So… in the coming weeks and months as the Webbs suggest more-of-their-same concrete blocks, it will be interesting to see how the city responds and what the Webbs will be allowed to pretend to get away with. Because for the past three years, all the Webbs have done is play pretend and its unclear if they can remember the way out of their own imagination (which must be torture — a drab, grey place with cement walls towering around them and no people anywhere).

Webb said he and Gang both talked with the owners of 21C Museum Hotel in Louisville, trying to recruit them to open a hotel in Lexington.

“When that didn’t work, … we went back to our original design for a convention hotel, which is much larger,” he said. Webb said the hotel would be a J.W. Marriott. “The design with the bundles wouldn’t work.”

So Dudley asked one hotel group if they’d be interested in a boutique hotel and then he threw his hands up?

There were no other boutiques to ask? No way to make that work?

No, not according to Dudley Webb. [More on this later.]

Asked whether Gang was given an opportunity to design a larger hotel, Webb said that Marriott “only deals with architects who have done convention hotels in the past, so consequently, we were at a dead end on that one.”

For now, let’s accept that is true [and more on that too, later]. Doesn’t that call into question the judgment (and, already, the ultimately proposed product) of a international chain — that it wouldn’t leap at the chance to put a mark on the industry by partnering with one of the brightest young stars of architecture?

And further… it just returns us to the ridiculous economics of the Webbs original proposal, a massive luxury hotel in a town that doesn’t need one, with nightly rates twice that of its nearby competitors and with occupancy rates twice that of the competition, too. If the Hyatt and Radisson are at 50-60%, is the obvious conclusion that there are more people who want to stay in hotels in Lexington but they don’t because the rooms don’t cost enough?

Or is the actual economic situation of the country, and the actual geographic reality of Lexington, such that this project has no place, has no need. If the Webbs build it, will all that change? Will ghosts emerge from the Bluegrass, rollerbags in hand and wads of cash bursting from their pockets?

Is that a fantasy? No way, not for Dudley! It’s a yet-to-be-based-on-a-true-story true story. People will come, Gray. People will come. For its money they have and peace they like.

Like that fallen mayor, Dudley Webb has vision.

The hotel design will have to change, [EOP Architect's] Ekhoff said. “Tubes worked well for a boutique hotel, but because of the needs of a J.W. Marriott, tubes didn’t work well,” he said. “We have to comply with J.W.’s very strict requirements in terms of use needs.”

Rooms will have to be larger, and there will be a 10,000-square-foot ballroom, he said.

Webb said Marriott architects “are going to come in and bless the room size, the lobby, the ballroom, the interior space of the hotel.”

Yeah, and they blessed the previous three monstrosities, too. So that’s heartening.

Webb has been trying to arrange financing since then. He said Thursday that two banks have expressed interest in financing the project once the design is complete.

“They are still standing by,” he said.

You know what? This one’s actually worth believing.

On its surface, its just yet another in a long line of lies by Dudley. There’s money, he always tells us and, always, it’s from some murky unnamed source. The dead guy was first and then there was his family and then there were these other investors and then there were a whole slew of them, an A plan and a B plan and a C plan and on and on. If you believe Dudley Webb, he’s always had the money.

But it never ever comes through. And then he says it’s because of the financial environment.

Which is true. The economy is not well. Which is why Gang’s smaller scale project made more sense (or, that was one reason). But the economy’s no better and the scale of this project will be just as daunting as the three numbskull plans that preceded it.

But… all Dudley is saying is that there are two banks that have expressed interest in financing the project once the design is complete.

That’s what banks do. In fact, that’s just the freindly way of anyone in business.

When one guy in a suit goes and talks to another guy in a suit and says, “I’ve got this great project that’s going to make you a lot of money,” then the other suit isn’t going to say, “Oh, I don’t want to make a lot of money. I’m not interested.”

Of course Dudley can find two banks that might express interest in a fictional project. They have nothing to lose in expressing interest. If they actually believed in it, they’d tell Dudley to come right out and name them. The head of the bank would lend vocal support. And even then, even still, that would mean absolutely nothing. There would still be no financial obligation on the part of the bank. Ultimately, any investor will entertain most any idea until they actually see its details and run the math only to find it’s a money loser.

So, sure, Dudley. Maybe a couple of anonymous banks have expressed interest. Maybe. Shouldn’t we give you the benefit of the doubt?

There’s much more on all this, and we’ll dig into that in the coming days. For now one thing is crystal clear. Whatever ill will the Webbs had amassed during the past three years, it will be back tenfold.

Whatever mistrust and disbelief they had wrapped themselves in is now magnified. They were right to invite the public into the project, to open the process up and present a truly great vision. But now they’ve yanked that away and they aren’t just back to the sad place they started at the beginning of this year… they’ve actually managed to dig themselves deeper into a hole.

It’s a shame that that’s the only ground they’re likely to be breaking any time soon.