New city hotel going up near the Convention Center

The voluminous Convention Center will gain a new and nearby hotel: a Hilton extended-stay franchise with 246 suites at the corner of 12th and Arch Streets.

The announcement of the first ground-up hotel to be built in the city since 2000 was made by Mayor Nutter and others at the Convention Center on Monday.

The new Hilton Home2 Suites Hotel will feature 375-square-foot studios (about 80 percent) and one-bedroom units. All suites will have kitchens. The $60 million hotel, to be built with public and private funds, will feature 9,750 square feet of retail space on street level and 2,000 square feet of meeting space.

The site is currently a surface parking lot owned by Parkway Corp. that sits diagonally across from the Convention Center and Reading Terminal Market.

"Every hotel helps us meet demand, not just for the Convention Center," said Nutter, standing outside a third-floor meeting room at the Convention Center that provided a perfect view of where the hotel is going to be built. "Every hotel creates economic activity. They create jobs."

New hotels apparently also create controversy, and Nutter and Philadelphia Convention and Visitors Bureau CEO and president Jack Ferguson tried to quell one.

The mayor and Ferguson touted the need for 2,000 more rooms on top of the city's current inventory of 10,700 at the groundbreaking of another hotel less than two weeks ago. The Greater Philadelphia Hotel Association took issue with the 2,000 figure, saying that would be too many rooms to fill in a weak economy. Existing hoteliers would have difficulty filling when there were no conventions in town, hotel officials said. The rift was the subject of a Sept. 17 Inquirer story.

On Monday, both Nutter and Ferguson backtracked, with each saying that 1,000 additional rooms were sufficient, since hundreds of new rooms had recently been added.

They cited the opening of the 230-room Palomar and 202-room Le Meridien over the last two years, and the anticipated arrival of the 268-room Monaco in the former Lafayette Building in Old City and the 136 units at the Homewood Suites planned for University City, both to open next year. Those hotels bring 836 rooms. The new Hilton Home2 Suites would add 246 more, bringing the total to just over 1,000.

Nutter and Ferguson said another 1,000 more on top of that would be adequate to support the Convention Center's $786 million expansion.

"Business begets business and creates buzz," Ferguson said. "The demand is there. It becomes a situation where, 'Is it the chicken or the egg first?' We want to support the expansion of the Convention Center. You don't want to turn away any demand segment. . . . But too much inventory, no one wants."

Ed Grose, head of the 87-member Greater Philadelphia Hotel Association, said his group and Ferguson had discussions over the last week to hash out their differences, and the revised 1,000 figure was more in keeping with what the hotel association wants to see.

"We have always supported smart and strategic hotel growth," said Hotel Association president James Gratton.

The announcement of a new downtown hotel was the second one in as many weeks for Nutter, who donned a hard hat Sept. 15 for the Monaco groundbreaking.

Nutter said the new Hilton hotel will create 123 construction jobs and 146 permanent jobs when it opens in about two years.

Parkway Corp. president Robert Zuritsky, who appeared with his father, company chairman and CEO Joseph Zuritsky, and Nutter, said there were plans for an official groundbreaking in two months.

"This, we feel, is the right product and the right time to do it," Zuritsky said. "12th and Arch is the gateway for many visitors to the Convention Center District."