Crowne Plaza Hotel owners cancel plans for second tower

Detroit — The owners of the Crowne Plaza Hotel have decided to pull their plans to build a second tower downtown after the City Council twice rejected their request. Instead, they will invest their money in property they own in other states, a representative said.

“I just feel unfair treatment from City Council,” said John Sabbagh, general manager of Crowne Plaza Hotel, which sits next door to the proposed second tower at Washington and Jefferson in the downtown.

“(The owners) didn’t really have time to sit here to continue battling somewhere where it’s clear they’re not wanted. We own the property next door. We own that parcel of land so we might try again in the future. We don’t know when that’s going to be. There are other items that are going to take priority. A hotel build takes quite a long time, a year, year and a half. We’re going to do a few of those before we ever come back to this.”

Sabbagh said the owners, Operadora de Servicio Para Hoteles de Lujo, will continue with projects on land the company owns in Houston and San Diego.

The company’s decision to pull plans for the $164 million investment to build a 28-story, 500-bed tower comes after the City Council voted 6-2 on Tuesday to reject the plan. Opposing council members did not express any issue with the proposed structure itself but rather room conditions in the existing building, employee pay and the hotel owner’s failure to sign a neutrality agreement acknowledging the workers’ rights to form a union.

A previous City Council vote in June resulted in a 7-2 vote to reject the project.

The issue comes at a time when Detroit has a need for more hotel rooms to accommodate many guests for major events. The area has numerous boutique hotels, but not many that can handle large groups of visitors.

Councilman Andre Spivey, who voted in favor of the project last week, said the downtown needs additional hotel rooms. He says that Detroit has 20-25 conventions coming to the area in 2019, which pales in comparison to other cities.

“Their lists far outweigh Detroit as far as getting conventions for 2019,” Spivey said “Of course one of the factors is do you have enough hotel space, and we don’t. To attract those bigger conventions, we need more hotel space. ... I think that tower is very important to put Detroit on the map as a destination place for conventions and meetings.”

Spivy said he hopes that the hotel’s owner will continue conversations with council members and approach the city again with its plans.

"I hope they look at the economics of the situation and realize that they need the tower; we need the tower," he said. "It's good for them and good for us. And hopefully, in the next week or two of weeks, additional meetings can be had, and we can bring it back to the table, and we can have a vote in the affirmative." 

Sabbagh has noted the hotel owners have not asked for any tax incentives for the project, which was expected to bring 250 permanent jobs. He said that many employees working in the current hotel were hoping to advance their careers at the new building, which would have been a more upscale brand.

John Roach, spokesman for Mayor Mike Duggan, said he doesn’t think the mayor will have a statement regarding the project as the developer hadn’t asked his office to engage in the issue.

Prior to the vote last week, among issues the council raised is how the hotel treated a failed vote to unionize in 2015. Nia Winston, president of Local 24 UniteHere!, who has spoke out against the project has said that they are seeking a neutrality agreement with the employer. Winston did not return a call seeking comment Tuesday.

In 2015, 80 workers rejected forming a union while 15 were in favor, according to Sabbagh. He said the hotel’s ownership group is not opposed to unions, and the hotel does have one, Local 324, International Union of Operating Engineers, which represents eight maintenance workers. The hotel just signed a renegotiated contract for three years.

City Council President Pro Tem Mary Sheffield previously said that if employees aren’t in favor of the union, there’s nothing that can be done, but she supports an environment of no intimidation from the employer if employees want to form a union.

Spivy said he believes the union issue can be handled separately, adding that he does support workers' rights to a safe environment and livable wages. He said the Crowne Plaza Hotel owners has resolved the issues the city has asked of them.

“Everything they were required to do by the city of Detroit, they did,” he said. “So we must be careful on how we hold projects up. One: How does that put a hold on our progress? Two: How does that look to others who want to come in and do business?”

cwilliams@detroitnews.com

Twitter: @CWilliams_DN