NEW YORK—Business is booming for many New York hotels but that doesn’t mean developing a property in the city is easy.
Krishna (K.K.) Mehta, a veteran developer and owner of the Mehta Family real estate firm, found himself with a stalled project in Brooklyn a year ago after the bank that financed the construction loan went bankrupt. The event resulted in construction delays, which meant missing city-mandated timetables.
“We were in trouble,” Mehta said.
He turned to local politicians, who were eager to maintain Brooklyn’s momentum as a hotel location. They helped Mehta through the red tape.
Ground was finally broken earlier this month on the $80-million Holiday Inn Brooklyn Nevins Station.
“It will be a very upscale hotel and one of the best in the system,” Mehta said at the hotel’s groundbreaking ceremony alongside key InterContinental Hotels Group executives. “The feasibility study … told us that it will be a very successful hotel and we are excited to be in Brooklyn, which is exploding as a destination.”
The opening is scheduled for early 2015 for the Holiday Inn, which is six blocks from Barclays Center, home of the NBA’s Brooklyn Nets. It also is near the Brooklyn Academy of Music, a cultural hub for the borough, and a block from the Nevins Street subway station.
Kirk Kinsell, president of the Americas region for IHG, was at the groundbreaking and said the delays cost eight months and millions of dollars.
“It’s great to be part of the resurgence of this community,” he said. “This will be among the best of all Holiday Inns.”
Part of the family
Kinsell said the Mehta family “has been part of the IHG family for 25 years and we look forward to our continued relationship with them.”
The 90,000-square-foot, 246-room hotel will have 15 floors with 3,000 square feet of meeting space, including three meeting rooms and a ballroom.
Mehta said he decided on the Holiday Inn brand because “it is the most distinctive name in hospitality and guests feel confident in their stays.
“The brand underwent a $1-billion makeover when the economy was in recession and that has been very successful,” he said. “We’re proud to be part of IHG and I am on the owners’ board of directors. I have owned other brands but the relationship of the franchisees to IHG is unparalleled and exceeds that of any other hotel group.”
Mehta gave credit to his son Sanjeev for finding the Brooklyn site and winning out in the bidding over intense competition. He said his company has more than 50% equity in the project.
“We expect a mix of business for this location,” Mehta said. “We have the Barclays Center nearby, downtown Brooklyn which has a lot of commercial activity and leisure. We will have a strong service culture, just as we do at our Staybridge Suites in Times Square. You need to keep people motivated and enthused and can’t just have an employer-employee relationship. They have to work from the heart and not just for a paycheck.”
Mehta said he wasn’t familiar with the Brooklyn market before getting involved with this project, but now says there is a lot of room for development.
“The percentage of rooms per capita is still low,” he said.
Mehta, a practicing accountant, has been in the hotel business since 1982.
“We only have three or four at a time. We don’t want to get too big so we can stay hands on,” he said.
Mehta’s company also owns the 3-year-old, 310-room Staybridge Suites in Times Square, the largest in the system. He said a bank involved in the Staybridge project had also gone bankrupt, but by then the hotel was 90% built “and that was a much smoother process.”
Kinsell said Holiday Inn is getting stronger as a brand.
“Brooklyn has become a strong brand around the world and we look forward to more development here,” he said. “We just opened a (Hotel) Indigo in Brooklyn last month.”