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Investors sought for SoBo hotel

Lynchburg developer Hal Craddock said Friday he thought his comments on development of the former John Randolph Hotel as a boutique hotel and key element in the town’s downtown revitalization efforts were well received.

“I thought it was pretty positive. I got no negative feedback,” Craddock said. “A few people came up to me and said they’d like to get involved.”

The building housing the former John Randolph Hotel is going to take a “fairly sizable addition to make the numbers work,” according to Craddock.

He thinks the concept of a hometown welcome mat hotel can work in a town the size of South Boston.

“It just takes the community getting behind it and having the property represent the community instead of a chain of hotels of a certain value,” said Craddock.

“Ours is about telling the story of a community and having people participate in that experience.”

Craddock and his group are trying to get investments in several different areas, including “seed investments,” the first four investments of about $200,000 in which people would get double equity.

“Invest $50,000, get $100,000 of value in the project,” explained Craddock.

“Then you have qualified investors and unqualified investors.  The law on the books says you cannot solicit more than 35 unqualified investors, generally people who make less than $200,000 a year. Qualified investors make more than $200,000 a year and are deemed to be qualified investors who can take the risk.”

A public-private partnership is the only way the John Randolph conversion can become a reality, Craddock added.

“If you don’t have local participation, it’s not going to work,” he explained on Friday. “That’s the formula we’re trying to bring to South Boston, public-private partnership.

“I think South Boston has made tremendous strides in taking a small community and making it better with things such as The Prizery and the SVHEC, and then you have big draws like the two race tracks, the hospital, all the events at The Prizery.”

“There’s a huge traffic count,” added Craddock, “I think 22,000 cars a day on 58, so you have the ingredients. Lynchburg was easier because it had a more diverse economy, but I think you have all the ingredients.

“It’s a matter of carefully pulling all that together, and everybody working together to make it happen,” he added.

“You all have a history of doing that in the education center and The Prizery,” he continued, “the difference being those required donations and contributions. We’re asking for an investment we feel there’ll be a return on.”

One downtown businessman said some people originally scoffed at an arts and entertainment venue, a higher education center and a four-star restaurant being located in downtown South Boston.

Frank Fincher, vice-president of Fincher’s Inc. and a board member of Destination Downtown South Boston, agreed with Craddock’s assessment it would take the efforts of a lot of involved people in a public-private partnership to make a boutique hotel and a revitalized downtown become a reality.

“In my opinion, that’s what studies are for. I would assume there would be some public funding, but the majority would be private invested money,” said Fincher.

“You have to spend some money to make some money.

‘What else do you have to go on.  Being a merchant downtown and being involved in it this whole time, the more action downtown the better.”

He realizes some people are, from a business standpoint, “on the fence.

“In terms of façade improvements, we all know that’s not cheap, and some may not have the money to invest,” Fincher noted.

“Let’s say you do have the money or borrowing power, a lot of times you need a little incentive to get that done when you see someone else do it.”

“If somebody doesn’t have the money, they don’t have the money.”

Fincher pointed out that although South Boston’s retail core has expanded beyond the downtown area, downtown still offers a lot. 

“It’s tough to have it all,” he admitted.  “If you don’t want to come downtown, that’s certainly up to them.

“But, if you provide a nice atmosphere for eat and drink and retail, and a pleasant place to walk and multiple things to do, it can be a really pleasant thing.”

Would he be interested in investing in the John Randolph boutique hotel?

“I really don’t know what that entails, I certainly wouldn’t rule it out,” Fincher replied.

“Just as much that would go into the hotel, at a minimum, would go into the other things.

“I have no idea what it means to be an investor in that group, but I certainly wouldn’t rule it out.”

Fincher noted you won’t find anyone, including himself and anyone in his family, who is more pro downtown.

“We realize things grow, and you can’t have it all downtown, but it’s sad to look at downtown now, especially when you know what has happened downtown in the past,” he explained.

“I do a decent amount of traveling, and people make all the difference with foot traffic and living downtown, even though I wouldn’t call this an urban area.

“You get something good going, and people will jump on board. If it’s tax money, everybody has a right to a say, if it’s private money, just watch and learn.”

South Boston IDA formerly accepted a $100,000 Industrial Revitalization Fund Grant in early February to be used toward purchase of the historic property.

The IDA also planned to commit $100,000 in matching funds to purchase the hotel property and the adjoining corner lot for parking development. 

At that time in February, it also planned to obtain a current market appraisal of the hotel property and assume property owner responsibilities regarding property insurance and building maintenance until the time the building is transferred to a developer.