A groundbreaking for Lynn’s first hotel since the Days Inn closed on the Lynnway in the 1990s continues to elude the city.
While a half dozen developers have expressed enthusiasm to alleviate the city’s hotel drought, none have taken the next step.
“There’s interest, but no one is ready to pull the trigger and get a site under agreement,” said Samuel Vitali, a real estate attorney. “The irony is the cost of borrowing money is free, but developers have to choose to borrow it.”
David Zeller, owner of the David E. Zeller Insurance Agency on the Lynnway, said the city’s reputation may be keeping hotel operators at bay.
“Why is it that no one wants to sleep in Lynn?” he asked. “Is it public safety, the lack of transportation, taxes? It seems like people prefer to sleep in Revere.”
Last fall, Zeller conducted a tour of his vacant 1.2-acre waterfront parcel on the Lynnway for Synergy Investments for a potential mega project that would include offices, apartments, shops, and a hotel on the Lynnway.
But the Boston developer, which created a $100 million fund to invest in Opportunity Zones, has not made any commitment to build.
“We’ve looked at Lynn and other communities for possible development including hotel construction, but that was a while ago,” said Ryan Chamberlain, Synergy’s director of business development. “We like Lynn, we think it has lots of potential, but there’s nothing we are close on.”
Congress designated 8,700 neighborhoods nationwide as Opportunity Zones. Construction in these economically depressed areas offer developers federal tax incentives.
There are four zones in Lynn that extend from Essex Street in the downtown to Western Avenue up to the General Edwards Bridge on the Revere border.
Zeller said his parcel was too small for Synergy’s multi-acre project. The team also looked at five adjacent lots owned by the Economic Development & Industrial Corp., the city’s development bank, he said. But two-thirds of the 5.3 acres are restricted to marine uses under state law.
“My take is this location is not a viable deal for their vision,” Zeller said. “We came close. My waterfront site still offers opportunities for the right project.”
Sebastian Colella, vice president at Pinnacle Advisory Group, the Boston-based hospitality consulting firm, said Revere was in a similar place a decade ago. But with the redevelopment of Suffolk Downs and the growth from Logan Airport, the city has attracted lots of development.
Revere has five hotels with five more either under construction or in the planning stages, he added.
Colella said the timing, given the uncertainty of the coronavirus, has put any talk of building or financing new hotels on hold. He said the occupancy rate in Boston’s hotels has been in the single digits due to the coronavirus for the past month.
Last year, Charles Patsios considered a boutique hotel at the Masonic Hall on Market Street which he purchased for $1.1 million. Instead, the Swampscott developer flipped the four-story brick building to the New Boston Cos. for $1.5 million. The Chelsea company is turning the landmark into 35 market rate apartments above the furniture store.
Mayor Thomas M. McGee and City Council President Darren Cyr were unavailable for comment.