By From the Lowell Sun
By Christopher Scott
LOWELL -- Embarking on what Chancellor Marty Meehan called a "new endeavor," UMass Lowell has signed an agreement with The Procaccianti Group of Rhode Island to buy the 252-room DoubleTree Hotel for $15 million.
Documents will be finalized on July 31, said Meehan, and on that same day, all DoubleTree signs will be removed and blue UMass Lowell Inn & Conference Center signs will be erected.
"The inn and conference center will transform this key facility in the heart of the downtown into the social, cultural and intellectual hub that was imagined in 1986 when the hotel opened," Meehan said. "This is indeed a new endeavor for us, and we're very excited about it."
As part of the deal, the current owner is spending about $2 million on window, heating/ventilation/air-conditioning and roof improvements.
UMass Lowell will spend another $4 million to prepare the facility to house about 350 upperclass, honors and foreign students in 175 rooms this September.
Meehan said the DoubleTree acquisition will allow UMass Lowell to alleviate some, but not all, of its student housing crunch. This past school year, the university was forced to house nearly 400 students in the Radisson Hotel in Nashua.
"We'll still have a waiting list of 120 students who need housing," Meehan said, "but we won't have to go out of state."
UMass Lowell is hoping to grow its student population by 5 percent a year. Two weeks ago, 2,100 students received degrees and represented the university's largest graduating class in history.
Meehan said 30 to 50 rooms at the new Inn & Conference Center will remain open to the public for hotel business.
The final number will be determined by a soon-to-be completed study in which UMass Lowell will establish a business model for running the center.
In the high-volume tourist months -- June through August -- when students aren't on campus, Meehan said the entire facility will be used as a hotel.
"We certainly want to work with the city to accommodate as many visitors as possible to Lowell during its high-traffic season," he said.
Under the financial details of the plan, the UMass Building Authority is borrowing the $15 million amount of the purchase price. Annual debt service, in the amount of about $1.5 million, will be paid by UMass Lowell over 40 years.
Meehan, however, said that once the center is fully operational, revenue from events and room rentals will cover debt-service payments. Some of those will be ready later this summer. All rooms, for students and the public, will be ready for occupancy by June 2010.
The deal has been more than a year in the making. Although it was Meehan's idea as a way to "connect" the university to the downtown -- a topic often talked about by his predecessors but never achieved -- he relied on UMass Trustee James Karam to initially raise the topic with The Procaccianti Group. Karam works in the hotel-hospitality profession.
"It's taken an enormous amount of work," said Meehan, who added that Evan Dobelle, former Middlesex Community College president and current president of Westfield State College, urged him to acquire the DoubleTree as a downtown economic-stimulus effort.
During an interview yesterday, Meehan said the university is getting a "good deal" for the hotel, as the building was recently appraised for $42 million. He said building a hotel that size today would cost more than $60 million.
The DoubleTree has an assessed value of about $7.7 million. This fiscal year, it generated nearly $200,000 in property taxes, as well as taxes on furniture and fixtures. In 2008, the most recent year for which statistics are available, the DoubleTree also generated more than $100,000 in room taxes.
Meehan acknowledged that the city will lose those revenue streams. However, he said a vibrant inn and conference center, with its positive economic spinoffs, will more than compensate for the loss of tax revenue.
In addition, the chancellor said UMass Lowell will contribute $200,000 in scholarships annually to Lowell residents, and work with the city on the possibility of sharing parking revenues derived from special events in the downtown, especially during the summer months.
As part of the purchase price, UMass Lowell will acquire the DoubleTree's 320 deeded parking spaces in the Lower Locks municipal garage property.
UMass President Jack Wilson, in applauding the deal, also spoke of the economic benefits to the downtown.
"This would bring the University of Massachusetts into the heart of downtown Lowell and thus would open the door to additional academic and economic collaborations and partnerships," Wilson said.
For instance, Meehan said he has no plans to operate a public restaurant inside the center, fearing it would compete against downtown eateries, though he is considering possibly opening a faculty club at some point.
Instead, he said UMass Lowell hopes to unveil a plan in which students use an authorized debit card to purchase meals and goods from participating downtown vendors and merchants.
"Students will be able to use the cards to provide access to the inn and conference center and to buy goods and services on-campus and off-campus," Meehan said. "We believe this will create more engagement in the downtown and help the local economy."
Meehan envisions operating the center in partnership with the Lowell National Historical Park, noting that abutting locks and canals are at the heart of the park's preservation efforts, and Middlesex Community College, students at which can complement their course offerings on culinary arts and hospitality management at the center.
The UMass Lowell move isn't unique. In recent years, Portland (Ore.) State University, Columbia University, the University of Pennsylvania, and the University of New Mexico have acquired urban properties for student housing and expanded programming. Portland State, in fact, purchased a DoubleTree for $20 million.
Ralph Izzi, a spokesman for the current owner of the Lowell DoubleTree, said it has been a pleasure to work with UMass Lowell officials on this deal.
"We're confident UMass Lowell's plans will have a great impact on downtown Lowell," Izzi said.
Reaction from Lowell's political and educational leaders was also positive.
"It's good for the university, it's good for students, and it's good for the city," said state Rep. Thomas Golden, a Lowell Democrat, who is also chairman of the Greater Merrimack Valley Convention and Visitors Bureau board of directors.
"A UMass Lowell hub downtown would introduce expanded programs, such as the Paul E. Tsongas Center, integrating the campus with the community in new ways," said Michael Creasey, superintendent of the national park. "Programs like this and other pa rtnerships will elevate UMass Lowell and the city as an exemplar in community innovation and civic engagement."
Added Middlesex President Carole Cowan: "This exciting partnership gives the college an opportunity to work closely with the university on academic programs for our students, such as our culinary-arts and hospitality-management offerings. It's an exciting time for both of our institutions."