Saving The Yorktowne: Unlikely story of how Hilton just might have saved a struggling city

, York Daily Record

The future of one of the largest cities in Pennsylvania was on the line. A surge of efforts to revive the faded downtown was in jeopardy. And few people recognized that the demise of a century-old hotel might doom the fate of York, Pa.

Hundreds of apartments and dozens of restaurants and retail shops had opened in recent years, but the Yorktowne Hotel remained on the sidelines – especially in the 18 months it sat vacant and under renovations.

Little support could be found to restore the historic hotel, replete with multiple ballrooms, a members-only dining room and 121 guest rooms that still — quaintly or archaically — used metal keys.

One proposal called for turning the Yorktowne into a boarding house, a home for transients, people stuck at the bottom of that ladder or clawing their way up.

On May 15, however, city leaders proudly announced a deal with Hilton that would reshape the Yorktowne as a modern, boutique hotel.

“It’s a real coup,” Silas Chamberlin, CEO of Downtown Inc. said.

The deal wasn’t an open-and-shut case either. This was Hilton Hotels –- the hospitality titan with more than 5,000 properties across 100 countries. This was the city of York, where national brands are rare, and include only basic names such as McDonald’s and Subway. Even those on the inside of the project weren’t completely confident until they neared the finish line.

So how did York, with its population of 43,000, woo Hilton? And how did this one project become so critical to the success of the city? This is a story of months of meetings, hundreds of documents and a lot of positive energy. And this is the story of the determination of a few people to make outside investors see the same potential in York that they did.

Laying the foundation

The Yorktowne Hotel opened in 1925 at South Duke and East Market streets.

In its heyday, it was the place to stay in York. If you were looking to hold a family reunion or a large dance, you did it at the Yorktowne. When politicians came to or through York on the campaign trail — as Bill Clinton did in 1992 – they stopped at the Yorktowne.

Sinatra. Cronkite. Tony Bennett. Lucille Ball. They stayed at the Yorktowne.

The Yorktowne went through changes over the years – such as the construction of a parking garage and seven-story addition in 1957.

The black-and-white terrazzo flooring was covered up by carpet, and several murals were hidden behind drop ceilings and sheetrock.

Hotel policy in its early years barred black people from staying there. Black musicians on tour would often stay at private homes instead.

A black bell captain once told a young Voni Grimes not to work at the Yorktowne because a black man could rise only so high there. But years later, when Grimes had achieved much working for other businesses in York County, he rose quite high at the Yorktowne — he made a room on the sixth floor his residence.

In 2010, the owners of the hotel, York Hotel Group, defaulted on a loan and owed $5.26 million to PNC Bank. The hotel narrowly avoided a sheriff’s sale six months later.

The hotel was eventually sold to Starwood Property Trust. The group purchased the property as part of a portfolio of properties and took the Yorktowne as a contingent to the deal, Jack Kay, chair of the York County Industrial Development Authority, said.

Starwood wasn’t out to get the Yorktowne. They didn’t even want the Yorktowne, but they had no option. It was a necessity for Starwood to acquire the other properties.

The Yorktowne was circling the drain — regular maintenance wasn’t happening, and there were no plans for a potential renovation or an update.

A past history of blight

Jack Kay had seen such plight before.

Around 2013, his real estate company, Susquehanna Real Estate, was contracted to make recommendations on the Hotel Sterling in Wilkes Barre.

The Sterling was built in 1897 and, like the Yorktowne, was once considered the city’s largest and most luxurious hotel.

But it was boarded up in 1998 after its owner failed to pay a $227,000 electric bill, local newspapers reported.

A small fire broke out in 2000.

And after a flood in 2011, it was finally condemned.

Kay’s group recommended removing the cancerous property – it had endured too much physical trauma and was left to rot for so long that it wasn’t financially feasible to save.

“It was such a blighting influence in that part of downtown, it could not be allowed to continue,” Kay said.

It was demolished in 2013, and the city holds a $570,000 lien on the site for the cost of the demolition. The Hotel Sterling site has had several potential projects eyed for the land, but the space remains vacant.

From guides to buyers

By 2015, Starwood was ready to unload the Yorktowne. The York County Industrial Development Authority and Kay, the chairman of the group, were watching, hoping to ensure a good outcome for whoever bought the property.

Starwood first listed the property for sale at $4.3 million and there were some prospects, Kay said, but the potential uses for the historic Yorktowne were not appealing.

One option was a low-end hotel, with little money slated for renovations – more boarding house than hotel, Kay said.

Other suitors also underwhelmed.

Kay remembered the fate suffered by Hotel Sterling.

“The property was too important and too critical… to let it just go by chance, particularly if there was a negative use that came from it,” Kay said. “It would take the air out of the balloon of everything going on, and that wasn’t going to be allowed to happen.”

So Kay led the charge for YCIDA to buy the Yorktowne. By the end of 2015, the deal was done.

In a sign of the depreciating value, the authority purchased the hotel for $1.8 million, just north of the $1.175 million it took to build it in 1925 and less than half of  the $4.3 million the hotel was originally listed at by Starwood.

The YCIDA had tackled other large projects – mainly the development of a minor league baseball stadium in York and Harley-Davidson’s ultra-modern West Campus just outside the city. Kay credits that new plant for Harley’s recent decision to divert jobs from Kansas City to York.

But the Yorktowne would be even larger, with an estimated $30 million budget.

An operator with a local touch

Ken Kochenour and GF Management kept an eye on the Yorktowne Hotel for more than a decade.

The company explored operating the property in the mid-2000s, but at the time, it made no financial sense, said Andy Taymans, vice president of asset and revenue management at GF.

But by late 2016, York was a different place, and when the YCIDA interviewed for operators, they threw their hat in the ring.

“York has come a long way in the last five years and we see it coming even further,” Taymans said. “We had the advantage of watching things over the years… the evolution of the restaurants downtown, the introduction of small breweries, the core of downtown being more walkable.”

About a dozen potential operators interviewed, Kay said, but GF stuck out for several reasons:

  • Both sides shared the view of a modern hotel that kept the Yorktowne’s history
  • GF Hospitality had prior experience working with top tier hotel brands, such as Hilton
  • They had experience in the area, previously owning a hotel along Route 30.

GF also had a champion for York in Kochenour – the co-founder of the company who grew up in York, graduated from York College and still works with the college.

“He’s always felt like whenever this made some sense, we wanted to be a part of it,” Taymans said. “It’s a matter of pride for your hometown and being able to do something and bring something back.”

Kay recognized the company’s commitment immediately.

“They knew the York market,” Kay said. “The York connection, while of itself wasn’t the deciding factor, it was helpful in getting comfortable with them.”

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