Hotel Project in the Works as Development Accelerates
YOUNGSTOWN, Ohio – A development group expects to roll out plans during the next month for a hotel in downtown’s Stambaugh Building, Dominic Marchionda said.
The downtown developer’s revelation came during a day that saw several downtown projects come to light, including the disclosure of the first commercial tenant for Marchionda’s Erie Terminal Place, a new project by Iron and String Life Enhancement Inc. and the Purple Cat, and the purchase of a North Phelps Street building by Marchionda and hotel and restaurant operator Michael Naffah.
“We’re leading the charge on that,” said Marchionda, part of the group that is working “very closely” with a hotel operator on the Stambaugh project. “We’ll probably announce that within the next 30 days. We have a rendering we’re putting together and we’ll announce that to the public soon.” The hotel could be operating within the next 18 to 24 months, he predicted.
The hotel project is the most high profile among the newest influx of downtown investments, each of which reflect the confidence in downtown shared by developers like Marchionda, Erie Terminal Place’s managing member.
Naffah, a businessman new to the downtown although by no means new to the Mahoning Valley, is president of Naffah Development and Naffah Hospitality. He partnered with Marchionda to purchase the building, at 26 N. Phelps St., at a sheriff’s sale Tuesday afternoon. It is occupied by Pig Iron Press. Naffah and Marchionda bid $90,000.
“We’ve been looking at everything that’s been going on downtown,” Naffah told The Business Journal. He and Marchionda have discussed doing something together for years “and this opportunity came up. … Hopefully we can do something that would continue to enhance downtown,” he said.
Naffah’s hospitality properties include The Embassy banquet hall in Boardman, Hampton Inn and Suites in Canfield, and the Shale Tavern & Grille in Lisbon.
Naffah said he first discussed the downtown venture with Marchionda a few days ago, and at this point doesn’t know what he and his partner will do with the building. “We’ll see how it progresses,” he said. “I’ll probably be relying a lot more on what Dominic’s thoughts are, to be honest with you, because he’s done a really great job in the revitalization of downtown.
Naffah acknowledged the circumstances under which he and Marchionda acquired the building are “not the way I like to buy” property.
“It’s unfortunate. I feel bad for the gentlemen [Jim Villani] that owned it, but someone was buying it. So I figured it would be better for us than someone else,” Naffah said. “We obviously don’t want to do anything to hurt the gentleman either.” At this point, he has never met Villani, who was trying to raise funds to keep the building, and did not know if future plans for the property would include him.
Also Tuesday, another downtown businessman, Jimmy Sutman, president of Iron and String Life Enhancement Inc., disclosed plans to expand his operations in the central city. Sutman’s Jack Rabbit LLC purchased buildings at 28 and 32 Fifth Ave. last summer.
“We’re looking at this to be an extension of our Purple Cat,” ISLE’s "day-habilitation" program for adults with disabilities, and possibly expanded administrative offices for ISLE as well, Sutman said. The property, previously occupied by Kolesar Display Co., would be used as a job-training site for individuals who have autism or other disabilities “where our folks need to be more one-on-one training in a quiet atmosphere,” he said.
Rehabilitating the Fifth Avenue properties will involve roof and elevator repairs, and could cost in the neighborhood of $400,000, Sutman said. The city’s Design Review Committee approved a sign on the building Tuesday for ISLE and Purple Cat.
“We’re excited to have this because it’s a gateway to the city here and very close to [Youngstown State University],” he said. “I’ve been trying to foster some good relations with our organization and Youngstown State so this will help us.”
Sutman, whose ISLE also plans to open the Sugar Plum luncheonette/bakery on West Federal Street this summer, said he is in discussions for more space for the Purple Cat with Rich Mills, president of Ohio One Corp., which owns the Rica Building where the Purple Cat is located. He also is talking with downtown property owner Dominic Gatta III about potentially relocating the operation to the Gallagher Building. “We’re out of space,” Sutman emphasized.
Marchionda’s Erie Terminal Place, which only began accepting tenants last summer, now has all but two of its apartments occupied, the developer noted. “It’s a positive sign,” said Marchionda.
The building’s first commercial tenant, a specialty baker, has targeted a March 15 opening date, “which is hopeful and ambitious at best,” conceded Bergen Giordani, One Hot Cookie’s owner. City and county permits remain to be issued. “We’re remaining optimistic that everything will work out” and the construction crew “can begin work and just bang it out in a couple days,” she said.
Design Review also approved a sign for One Hot Cookie at its meeting Tuesday.
One Hot Cookie will specialize in cookies, coffee and cold beverages such as milk, soft drinks or bottled water. “It will cater to the entertainment district and YSU students,” Giordani said. “It’ll have extended hours on Friday and Saturday nights to cater to their late-night needs.”
Giordani, who is director of special events for the Youngstown/Warren Regional Chamber, said a couple of factors influenced her desire to start the venture. “Who doesn’t love cookies, first of all?” she remarked. “I thought now was the time to try something new, something different. My daughter is older so I have a little more free time.” She plans to retain her chamber job and supervise One Hot Cookie’s staff of six to eight part-time employees.
“It’s something new, it’s something fresh and it’s something that not only the tenants but the community is excited about,” Marchionda observed of Giordani's venture. Similar shops are “a hot commodity” at other college campuses around the state and he expects it to be just as well received here.
Marchionda said he has a “letter of interest” from what he describes as a “Grade A tenant” for one of the remaining retail spaces, but stressed that he is being selective. “We’re looking for the right tenant in the other two spaces. I’m not going to sign up a tenant just to collect the rent. I’m looking for a long-term commitment and something that’s not going to cannibalize anything else.”
When Erie Terminal Place opened its doors last summer, Marchionda anticipated a tenant mix of 60% undergraduate students and 20% graduate students and young professionals. However, undergrads are leasing about 80% of the apartments, leading him to modify his plans somewhat for the nearby Wick Building. There, 32 apartments will be dedicated to grad students and young professionals, and the remaining 20 or so units will be dedicated for extended stay or overnight lodging, catering to people doing business with companies downtown or the oil and gas industry, he said.
“We’re working on the final financing for the project,” Marchionda said. “We have a couple lenders we’re talking to and working through that process.”
Copyright 2013 The Business Journal, Youngstown, Ohio.
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