The Miami-based developer should know. He won city council approval to build a hotel on Glen Ave. in December 2017—but didn’t start construction on his Vanguard Hotel until last year.
Local hotels were devastated by the Covid-19 pandemic. “We made around $11,000 in revenue for the month of April 2020,” recalls Matthew Bennett, general manager of the Courtyard Marriott on Boardwalk. “Our electric bill is $12,000. So we weren’t even making enough money to cover one bill, much less everything else.”
With no one traveling or staying in hotels, he had to lay off ninety-five people. He says the Courtyard Marriott remained open only because the management company, Island Hospitality, covered incoming bills.
Bennett has since staffed back up. “The Monday-through-Thursday business is down,” he says, “but the weekends have really kind of come back with a vengeance. I think the term that was used was, like, ‘revenge travel.’ And that’s what we’re seeing—where people are leaving their houses, regardless of what the price is.”
“The impact of Covid obviously had a hugely negative impact on the hospitality business,” says Finvarb, whose eponymous company owns ten hotels around the country. But now, he says, the mindset they’re seeing is, “‘I don’t care about Covid anymore.’ Everybody is out there doing business, traveling, and living life.
“They want to get back out there. They want to be enjoying life, and I think it’s a healthy reset.”
He expects the Vanguard will get a lot of business from Michigan Medicine, whose new $920-million, 264-bed Kahn Health Care Pavillion Hospital sits just up the hill.
“We felt there was a tremendous need for an upscale hotel,” Finvarb says. “Everyone traditionally thinks about football weekends and graduations. But there are thousands of companies that do business with the university. The medical center is a top medical center internationally. There are patients, visiting professors, visiting doctors, researchers, and pharmaceutical companies.
“There’s a tremendous amount of demand, not fully satisfied, in and around downtown and Ann Arbor. We felt there is a tremendous need to cater to those various customers.”
Finvarb has Detroit-area partners—Craig Singer, Fred Goldberg, Tom Goldberg, and attorney and former U-M regent Larry Deitch—but calls himself “the quarterback of the project.” He has overseen every detail of its development, putting together the design team and construction crew, and will serve as the hotel’s owner once it’s complete.
In addition to the Vanguard, two other hotels are under development downtown. Iowa-based Hawkeye Hotels is building a ninety-four-room Fairfield Inn on the site of the former Relax Station on the corner of First and W. Huron. They’re aiming to open in the second quarter of 2024.
On E. Huron across from City Hall, First Martin Corporation and an undisclosed partner are planning a 139-room Marriott AC Hotel. Named for founder Antonio Catalan, the “design forward” chain is expanding rapidly in the U.S.
First Martin also owns the Marriott Residence Inn on W. Huron. President Mike Martin says it also felt a tremendous impact from Covid-19, but remained in operation with help from a federal Paycheck Protection Program loan. That “helped us keep the hotel afloat and the folks that worked for us employed,” Martin says. “But we were suffering along with everyone else in the hospitality industry.”
Now hotels are back and it’s office buildings that are suffering. The vacant E. Huron site “was going to be a built-to-suit office,” says Martin. “But there was never anyone that wanted us to do that for them.”
They found the answer in the hotel revival. “We’re still in the entitlement process, which we expect to wrap up around this summer,” Martin says. “We’re targeting a fall start this year or spring start of next year,” with completion by the summer of 2025.
Finvarb says the Vanguard Hotel is also about two years out. Conveniently, while supervising its construction, he has another reason to visit Ann Arbor: his son Jack is a U-M undergrad.