Dallas City News

Before Tuesday’s Luzerne County Council vote, three community leaders presented their views on why a $3 million allocation was warranted for a hotel/convention center project at the former Hotel Sterling site in Wilkes-Barre.

A council majority ended up approving the earmark toward H&N Investment’s $37 million, 112-room Gateway Hyatt Place Hotel and Conference Center on a 2.1-acre lot at River and Market streets where the landmark Hotel Sterling once stood.

Council members said an indemnity clause and other conditions will help protect the county funding if problems surface.

Terrence W. Casey, who oversees a financial investment advisory firm based in downtown Wilkes-Barre, told council there is a “huge need” for downtown hotel space.

“We haven’t had a flagship hotel in downtown Wilkes-Barre since the Sheraton Crossgates left. That meant we have not been able to have a convention in downtown Wilkes-Barre,” Casey said.

He was referring to the 183-room Public Square hotel that opened the end of 1980. It later became the Ramada Inn and was then purchased by King’s College to be repurposed for academic use.

Casey cited several major downtown gatherings that were held in the 1980s, including a Lion’s Club national convention.

“All of that resulted in a tremendous amount of money to the businesses in downtown Wilkes-Barre and to the residents here,” Casey said.

Casey serves on the Wilkes University Board of Trustees and said he learned an estimated 5,000 downtown hotel rooms would be booked annually for activities and visits related to the university. Another approximately 4,500 stays per year were anticipated for King’s College, he said.

“I’m very much in support of this,” Casey said of the Sterling allocation.

Casey said he has worked in the city’s downtown since he graduated from Wilkes in 1981.

“I’ve been through a lot of cycles in downtown Wilkes-Barre,” he said, noting the Sterling site has been an empty lot for a “very long time.” The hotel was condemned and demolished in 2013.

The Gateway Hyatt Place Hotel and Conference Center would be constructed with a mix of private and public dollars, and the private investment “shows a strong commitment,” he said.

“This appears to me to be a very viable project from what I know of it, and I’ve done a lot of research,” Casey said.

Downtown recovery

Larry Newman, who runs the Diamond City Partnership —Wilkes-Barre’s downtown management organization — said the funding request is part of a broader post-pandemic downtown recovery plan.

At the start of 2020, 10% of all county jobs were located in the city’s downtown, and the downtown economy was powered by office workers, he said.

“While there were other pillars — arts, dining, entertainment, the colleges, Boscov’s and the downtown housing sector that added more than 1,000 new residents in the last decade — the office market was our foundation,” Newman said. “That foundation has been rocked.”

Employee visits to the downtown in 2023 were 56% of the 2019 total, and it’s “unlikely the office sector here or anywhere else is going to return to the way it was before,” he said. As a result, a “new course” had to be set.

“We’re working to shape a downtown that people are going to visit because they want to be here, not because they’re required to be here,” he said.

This focus includes residential development, the colleges, concerts and festivals, dining, night life, the arts and “curb appeal” to make the downtown safe, clean and attractive, he said.

“But we’re missing a big piece of the puzzle because the downtown’s lodging sector is so underdeveloped,” Newman said.

Today, the downtown has one hotel with 72 rooms, which means it cannot host larger conferences that go to Scranton or other cities with multiple downtown hotel options, he said.

Travelers want choices, and event bookers are increasingly looking for walkable downtowns offering options for lodging, dining and recreation, he said.

“We’ve got the dining and the amenities, but we don’t have the room count,” he said.

Data from across the country shows downtowns with higher percentages of employment in leisure and hospitality have had higher overall recovery rates, he said.

“But to unlock this potential, we have to invest in it,” Newman told council.

Downtowns with more robust visitor sectors, such as Lancaster and Scranton, “didn’t occur by accident” and instead resulted from substantial public investment over decades into the planning and development of hotels, meeting space and visitor attractions, he said.

“If we want to achieve similar results here, we have to get similar commitments,” Newman said. “So please know that by choosing to invest in enhancing downtown’s hospitality sector, you’ll be driving the recovery of Luzerne County’s largest city and adding long-term value to the county economy.”

Staying competitive

Bob Borwick, chair of the Diamond City Partnership Board and the county’s visitor and tourism bureau board, pointed to extensive private development that resulted from public investment in the Mohegan Sun Arena and roadway infrastructure in Wilkes-Barre Township.

While growth in the township has been positive, officials must make sure downtown retailers stay viable, he said.

“Let’s face it that we need to grow this community and be strong and competitive and that a downtown hotel will definitely make a major difference,” Borwick said. “I support it wholeheartedly.”

Sterling project

Under the conditions council approved Tuesday, the county grant for the Gateway Hyatt Place project would be rescinded if construction does not start within 36 months. County funds would be released in two phases — the first after the structure shell is completed and the second after the remainder of the work is finished.

H&N representative Stephen Barrouk told council the goal will be to break ground this summer with the required removal of underground debris left from the hotel demolition.

“We’re grateful to get the county support,” Barrouk said Wednesday. “We still have some building blocks that we have to accomplish. Hopefully we’ll have more to talk about in the very near future.”

Council did not proceed Tuesday with a requested $2 million allocation for BIG Public Square LLC to acquire and convert the former First National Bank building into an upscale restaurant linked to a 105-room “Tribute by Marriott brand” boutique hotel it is creating inside its adjacent Luzerne Bank Building. That project is estimated at $23.8 million.

Several county council members said they were influenced by the developer’s comments during a Wilkes-Barre City Council meeting that the First National Bank building could be restored for a meeting space instead of a restaurant if the county funding was not provided. Concerns also were expressed about the county investing in a restaurant.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.