Tax-Credit Delay Keeps Restaurants Out of DoubleTree
YOUNGSTOWN, Ohio – Because of delays in approval of state and federal historic preservation tax credits, approximately 3,000 square feet of space at the DoubleTree by Hilton Youngstown Downtown remains unfinished. Still, hotel occupancy is exceeding expectations, developers says, and a portion of the first floor will soon be occupied by Chemical Bank.
Yosteria and Branch Street Coffee Roasters were expected to open restaurants this summer in the hotel, but have since announced they aren’t moving forward with those plans.
David Rizzuto, director of operations for Pan Brothers Associates Inc. in New York, said the tax-credit delays caused cost overruns on the project because of the additional interest accrued. As a result, capital that otherwise would have gone into preparing the restaurant space for Yosteria and Branch Street was redeployed, he said.
Pan Brothers partnered with NYO Property Group, Youngstown, on the redevelopment of the century-old office building as a hotel, which opened in May.
Rizzuto previously cited the delay in approval of the federal and state tax credits as the reason the hotel partnership sought additional time from the city to repay the $2.05 million bridge loan it received for the project.
Nevertheless, the developers will soon begin build-out work on the approximately 3,000 square feet of space and are “actively marketing” it, he said. At the same time, Chemical Bank, which has an office one block away at 25 Market St., will take about 600 square feet in the building, according to Rizzuto.
So far, DoubleTree overall is performing above early projections, said Rizzuto and Steve Mitchell, the hotel’s general manager.
“We’ve been experiencing better-than-average occupancy and we’ve seen some pickup in our local negotiated rate business,” as well as growth in weekend business, Rizzuto said.
Occupancy percentages are in the 70s, Mitchell affirmed. “Our expectation was to be in the upper 50s,” he said. Room rates are staying about $10 ahead of the hotel’s primary competitors, he added.
Several accounts have gained traction in October and the hotel is seeing “big jumps” in occupancy, he continued. The hotel is sold out for four days this week and weekend business remains strong. The hotel ballroom is booked every weekend in December and the catering business is doing well, he said.
Business at Bistro 1907, the hotel’s restaurant and caterer, is “way above projections for the year,” owner Mark Canzonetta said. He expects first-year business to be about 25% ahead of what he had projected.
“Downtown has really graciously taken Bistro 1907 into its family,” Canzonetta said.
The restaurant is drawing more customers from the surrounding area than he had expected initially. Events like country star Keith Urban’s concert last Wednesday at the Covelli Centre are like “a Saturday night on a weekday” for the restaurant, he said.
Canzonetta is eagerly anticipating the impact from the amphitheater and riverfront park under construction, he said.
And with the success of Bistro 1907, he is scouting downtown locations for a second restaurant featuring a Mexican concept.
“I want to bring my version of Mexican food to the Valley, which is very authentic,” he said.
Canzonetta has drafted the menu and the interior design concept. “It’s just a matter of the right building and the right financing,” he said.
Copyright 2022 The Business Journal, Youngstown, Ohio.