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That Hotel

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The finished hotel sat cold and vacant for more than 10 years while court battles raged and various owners worked to bring it to life.Through the years, a vacant hotel that casts a shadow on northbound I-95 just south of Wilmington has been referred to as an eyesore, a ghost and a white elephant. And thanks to the fact that the hotel was built in a floodplain, some have said the six-story, V-shaped building resembles a castle surrounded by a moat.

This infamous structure has probably garnered more headlines than any local building this side of the Hotel du Pont, and its inescapable link to the name Capano has undoubtedly added an air of intrigue to its aura.

Yes. This is that hotel.

We all know—or think we know—the story by now: The hotel was built larger than approved plans called for and the county, claiming the developers were purposefully flouting land use laws, made an example of the owners by not allowing the finished hotel to open.

The developers, two well-known local builders who had been in the news before, said a mistake was made and that they were being treated unfairly by the county.

The battle became so contentious that someone suggested requiring the developers to fill two floors with foam before the hotel would be allowed to open. A few years later, a letter to the editor in The News Journal suggested the vacant building be used to house those in the Gulf whom were displaced by Hurricane Katrina.

Simply put, the iconic building became the poster child for a land use battle gone bad—or good, depending on who you side with.

Now, after more than 10 years of court battles, four different owners, and millions of dollars spent on improvements, upgrades and attorneys, the hotel that had yet to host even one guest has gone from being vacant to filling vacancies.

The “new” Sheraton Wilmington South opened in early December. It features three types of guest rooms (192 total), eight conference rooms, a presidential suite, a modern restaurant and a lobby lounge (housed in a breathtaking, six-story atrium), a ballroom, indoor swimming pool and a state-of-the art fitness club.

The next chapter of the hotel’s story has yet to be written. Can it be successful? Some experts say the market isn’t quite there, while others hope to see the lonesome loser come out on top.

Still, others wonder whether the hotel will succeed in spite of its reputation, or perhaps because of it. Its management anticipates the building’s storied past will work some marketing magic.

“The great part about it is we have 10 years of history, albeit, it may not be the history that you would normally want for a hotel,” says Jeremy Costa, general manager. “But it’s a great starting block for us. Because of the intrigue of the building, there’s been 10 years’ worth of marketing on this property without us even owning it.”

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The remains of the original spiral staircase were eventually removed piecemeal by workers with torches. Photograph by Jared CastaldiHotel Hell

That “marketing” began in 1990 when New Castle County approved a plan by local developers Albert Vietri and Joseph L. Capano Sr., operating as Wilmington Hospitality LLC, to build a six-story hotel on a controversial property along Interstate 95 between Christiana and Wilmington.

For many New Castle County residents, the story has become all too familiar. As the developers finished construction of the hotel during the summer of 2000—it was franchised as a classy Radisson—county inspectors discovered the building was more than 30 percent larger than the approved plans allowed. It wasn’t built taller than its blueprint, the hotel simply contained extra square footage equivalent to two floors. New Castle County officials refused to grant the developers the certificate of occupancy that would have allowed them to open for business.

The resulting court battles between two different New Castle County administrations and Wilmington Hospitality would drag on for years, capturing many headlines in the process.

The county said the developers intentionally overbuilt, while the developers claimed it was a hiccup between their architects and engineers. The developers also charged that the county should have caught the discrepancy when it issued building permits in 1998.

Tom Gordon, who served as county executive at the time, still isn’t buying any of it.

“You couldn’t miss it by that much,” he says. “You don’t add that much square footage and not know it.”

Dave Culver, the current general manager of the county’s land use department, who worked in the department’s planning division during the time of the hotel controversy, says there is no scapegoat from the county’s side.

“I don’t believe there’s any one person to blame,” he says. “The plans reviewed were for a hotel in New Castle County. Certification is required for the hotel. During final inspection a lot of discrepancies were being discovered. It led to years of administrative approval and litigation.”

Not knowing when they might be allowed to open the hotel, the owners had to let employees go.

The top of the towering, six-story atrium was quite a sight, even before renovations were completed. Photograph by Jared CastaldiBilly Walsh, now a senior sales executive at the Baltimore Marriott Waterfront, was hired and trained at the former Radisson as a front desk agent. A junior at the University of Delaware’s hotel and restaurant management program at the time, Walsh was hired during the spring of 2000 and then laid off with the hotel’s other 100-plus employees just before summer.

“The worst part of the whole situation was people losing jobs,” Walsh says. “The GM and assistant GM had quit their previous jobs. Some came from the Hotel du Pont and Philly-area hotels. They were banking on the hotel to open. I was in college, so it wasn’t a life-changer for me.”

Walsh recalls the day the ax fell. “They called us all in for a mandatory meeting. The GM was almost in tears. Human Relations was there. They said they didn’t know when they were getting the certificate of occupancy, didn’t know when they were opening and it cost too much to keep staff when they’re not open.

“The lights were on. The heat was on. It was ready to open. That’s the part that bothers me.”

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Bill Sullivan was working as general manager of the Hotel du Pont and the DuPont Country Club when the former Radisson was being readied to open. Sullivan is now managing director at Courtyard Newark at the University of Delaware, and a board member and past chair of the Delaware Hotel and Lodging Association.

“It was probably going to be the biggest hotel to open in New Castle County in 10 or 15 years,” Sullivan says. “There were groups on the books and they were going to be off to a great start. The shame of it is about 150 people were expecting jobs and then the next day they lost their jobs.”

The hotel’s struggles continued. Wilmington Hospitality defaulted on its $19 million mortgage from Florida-based Republic Bank and filed for bankruptcy in July 2001. The Radisson franchise expired in June 2002 and the company’s signs were taken down. The bank took ownership of the property in April 2002.

The indoor pool area is ready to receive its new tiles during renovations. Photograph by Jared CastaldiThe bank added land—16 acres to the existing 3 acres—for parking and additional landscaping improvements to reduce the hotel’s impact on the floodplain. In May 2003, the company that owns Delaware Park purchased the hotel from the bank for $11.2 million.

Wilmington Hospitality filed a suit in July 2003 in New Castle County Superior Court, claiming its civil rights were violated because the county wouldn’t let it open the hotel. The suit asked for $20 million in damages. A previous suit filed in U.S. District Court in Philadelphia said the county had violated Wilmington Hospitality’s right to due process and equal protection under the law and intentionally breached an agreement to issue a temporary certificate of occupancy. That suit was dismissed a month before the 2003 suit was filed.

The new owners, Parkside V LLC, would need to make further improvements in order to receive a certificate of occupancy from the county. Those improvements included resolving continued flooding and parking issues and upgrading the sprinkler and electrical systems. Some of the work was necessary because county codes had been strengthened since the hotel was built. Parkside also bought out a junk yard across the street. At one point, Parkside had to fix more than 600 problems with the property.

In June 2007, a jury awarded the developers $7.5 million plus $1.6 million in attorneys’ fees, saying the county had treated them irrationally and differently than other developers. But in 2008 the Delaware Supreme Court overturned the verdict, ruling that the developers failed to prove unfair treatment by the county or that they were targeted unfairly. Justice Carolyn Berger also ruled that Wilmington Hospitality tried to get away with ignoring county codes and regulations.

In the summer of 2010, the county finally issued a certificate of occupancy to Parkside V. About five months later, the hotel was sold to Philadelphia-based Hersha Hospitality Trust for $15 million.

“When the great recession hit, we had a change of thought,” says Bill Fasy, president of Delaware Park, which had planned to use the hotel in part to house casino customers. “We didn’t want to spend any more money. It was, to coin a phrase, time to shit or get off the pot.”

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This view from the east wing of the hotel overlooks the terrace and surrounding wetlands. The terrace entrance to the ballroom is seen at left. Photograph by Jared CastaldiChecking In

Beautiful pockets of creek and marsh decorate both sides of Airport Road, which carries traffic to the hotel from Del. 141.

At the bend where the road meets I-95, the hotel rises like an oasis from the wetlands. The building is separated from the interstate’s northbound lanes by a narrow parking lot and a grassy shoulder. A drainage ditch separates the hotel’s main entrance from Airport Road.

From its parking lot, the V-shaped hotel does not appear run down or weathered. And behind the pale facade and tinted windows—windows that reflect the outside world like giant aviator glasses—appears to be a brand new hotel.

Yes, the skeleton has been around for more than a decade, but the hotel’s original Radisson furnishings—beds, furniture, carpets and even each room’s heater/AC units—have been gutted and replaced with Sheraton’s modern decor.

“There was lots of walnut and brass,” says Costa. “It had a boys’ club kind of feel to it.”

Dozens of contractors from various trades worked feverishly since May to re-outfit the hotel.

Hersha donated the guts of the former Radisson to Habitat for Humanity of New Castle County. Volunteers filled two tractor trailers with cabinets, granite countertops, towel bars, closet doors and hair
dryers. Habitat has been selling the stuff from its ReStore shop in Wilmington since May. The towel racks sold for $3 apiece while the granite countertops go for about $125, say ReStore manager Joe Robertson.

A number of structural features of the Radisson didn’t survive the transition. The hotel’s grand spiral staircase near the main entrance was removed piecemeal, as workers used torches to sever its steely spine. In its final days, the stairs’ main support, jutting from the debris-littered lobby floor, resembled a scene from Ground Zero.

In its place stands a glass-sided staircase—built specifically with bridal party photo ops in mind—that will transport guests to and from the second floor. The lobby also features elevators with glass walls that allow passengers a bird’s-eye view of the bar and open-air restaurant below.

An October tour of the hotel—still under intense renovation—revealed stark contrasts between old and new. Long hallways were freshly painted and papered in warm browns, but still felt cold, thanks in part to dust-covered concrete floors with each room number spray-painted in red. An intricate structure of scaffolding filled all six floors of the cavernous atrium, while most guest rooms on the top floors were furnished and ready for business.

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A discarded brass placard labeled “Vienna 1” rested on the floor outside the entrance to a second-floor meeting room. The room is now called the Potomac, as all meeting rooms are named after regional bodies of water.

Heading down the hallways and letting the imagination run wild, one might have expected blood to gush from the elevators or a cute little kid to come tearing around the corner on a Big Wheel, a la “The Shining.”

But contrary to what some may think, the hotel did not seem creepy. During the tour, managers addressed the existence of ghosts at the hotel. Susan Shaid-Kedson, director of sales and marketing, was quick to squash the notion. “No one ever stayed here, so there wasn’t a chance to have ghosts.”

What the building does have is what Costa calls “dramatic features”—like crown molding and chair rail molding—touches constructed by the original builders.

Ironically, the extra square footage that ignited the controversy adds to the interior’s dramatic appearance. Says Costa, “This property has features that you wouldn’t build today. In a hotel today, when you’re looking at every dollar, every inch is considered prime real estate, not wasted space.”

The first floor houses the lobby, a restaurant, ballroom, pool area, exercise room, meeting spaces and administrative offices. The Atrium Lounge takes center stage with the Wilmington Grille located to the left as guests enter the hotel. Shaid-Kedson says the menu will feature “traditional American favorites” for breakfast, lunch and dinner.

The ballroom—with its rich inlaid woods and wide open views onto the marsh and the Wetlands Terrace—is located in the left wing of the V-shaped hotel. The indoor heated pool and Whirlpool spa are housed in the right wing. Conference rooms are on the second floor and the presidential suite is located on the sixth floor.

The hotel brass is obviously proud of their work and excited to see the long embattled hotel finally doing what it was built to do. “We’ll let the product speak for itself,” says Costa.

 

A guest room, with its new furniture and amenities, is ready for business. Photograph courtesy of Sheraton

A Hospitable Market?

As for the potential of the Sheraton Wilmington South, Costa says a market analysis showed “there is enough demand for business to support this number of rooms.” He mentions the existence of Fortune 500 companies located in the area, as well as the hotel’s proximity to corporate markets in Wilmington, Christiana and New Castle.

“We want to make it a community center for business and traveling clients,” Costa says. “Basically, everything ranging from Wilmington to Newark in regard to our business traveler and meetings-wise. Our hope is we can pull anything from Philly down to Baltimore, because of our convenience to I-95 and our central location to that area.

“We do feel that part of our business base will be that traveler going from the south to the north or the north to the south.”

Sullivan says the Sheraton, despite being situated just off I-95, will have to develop its own market.

The new owners retained all of the intricate wood molding located throughout the hotel, including the trim around the French doors. Photograph courtesy of Sheraton.

“They’re located at an area of high traffic, but it’s not like the old days,” he says. “People don’t ride down the highway looking for a hotel. They book online, use Expedia.com, to make reservations. (The Sheraton has) got to go out and sell and get corporate functions.”

Costa says the hotel, indeed, will work to bring in social events like weddings, fundraisers and corporate conferences. The Sheraton has eight conference rooms, including the ballroom, and it will employ a certified wedding and event planner on-site.

The hotel has already proven a boon to the local economy. Combined with the work it provided contractors during renovations, the hotel will employ 90 people and have an annual payroll of $2.5 million, says Costa.

As a hotel manager and a member of the state’s hotel and lodging association, Sullivan looks at the Sheraton Wilmington South as potentially attracting business to the area that currently isn’t here. But he admits the Sheraton also provides competition—especially for hotels in the Christiana and New Castle areas.

“Of course, any time you add to the market, it dilutes it a little bit,” he says. “The industry is still recovering from the recession. We bottomed out in 2008 or 2009. We’ve been rebounding since then. I get reports about the county and state—things have turned around pretty good. It’s not devastating, as far as supply.

“Hersha has a great reputation of running hotels in Philadelphia,” Sullivan says. “It’s exciting for Delaware to have a new hotel.”

Or a new “old” hotel.