The new owners of Fayetteville’s Prince Charles Hotel have suffered numerous setbacks in getting renovations underway. One of the obstacles was the lack of money to do the job. Urban developers with sterling reputations and decades of commercial construction experience across North Carolina could not get a bank to finance their plan to refurbish and reopen the rundown building. Investors in what is now Prince Charles Holdings Development, LLC, approached 10 North Carolina banks for loans and were turned down by all of them, according to PCH Development Manager Jordan Jones. Why? “… because it was a downtown Fayetteville project,” he said. “The banks haven’t gotten beyond the city’s Fayettenam reputation,” Jones added. He and Michael Lemanski, both of Durham, are overseeing a $15 million restoration of the nearly century-old Hay Street landmark. “I’m excited about the opportunity to bring one of Fayetteville’s iconic buildings back to life and contribute to the revitalization process already underway in downtown Fayetteville,” lead investor Michael Cohen said in a statement when he acquired the property last year.
The investment group bought the hotel at auction for $200,000. The adjoining 2.5-acre property was another $2 million. After being turned down by the banks, Prince Charles Holdings began exploring non-traditional financing and is confident about the prospects of a $9 million urban mixed-use loan from the U.S. Department of Housing and Urban Development, according to Jones. Ironically, his great grandfather’s company, J.A. Jones Construction Company, built the hotel, which opened in 1923. Most of the rest of the construction costs will be offset by federal and state historic tax credits, some of which were only recently restored by the state legislature at the urging of Governor Pat McCrory. “We see a lot of potential in the future of downtown Fayetteville,” said Jones.
Lemanski’s firm, Greenfire Development, has managed more than $300 million of investment in distressed properties in downtown Durham. There’s a lot of work to be done on the Prince Charles. The interior of the eight-story building will be entirely overhauled and rebuilt, resulting in 62 one-and two-bedroom apartments Jones told Up & Coming Weekly. They will rent from $800 to $1,200 a month. The former eighth floor ballroom will be transformed into a three-bedroom, three full-bath penthouse. It will contain 3,300 square feet with 14’ ceilings and historic hardwood floors. The tenant will have exclusive access to the terrace, which overlooks Hay Street. “This unit has the potential to be the most exclusive residential unit in downtown Fayetteville,” Jones declared. It will rent for $3,300 a month.
$2 million alone will be spent on the building’s façade, according to Jones, including $800,000 to refurbish the windows. They cannot be replaced because the building is in an historic district. The windows can be repaired so long as they retain their original appearance. Retail shops and an upscale restaurant will occupy the first floor and mezzanine and will be entered from Hay Street. Apartment dwellers will enter from a private side entrance near the elevators. “This is going to change Fayetteville,” declared Jones. “The apartments will fill a void in the market,” he added, citing “the many people who work downtown and have no place nearby to live.” Use of the historic tax credits requires that units be leased for the first five years. They could be converted to owner-occupied condominiums after that. “The market will decide which way to go,” according to Jones. Construction isn’t expected to get underway until next June and will take about a year to complete.
With an executed memorandum of understanding with the City of Fayetteville, Prince Charles Holdings is planning an estimated $60 million in commercial development around the planned baseball stadium. That could include a parking deck, hotel, more apartments and other amenities. Also planned is a pedestrian foot bridge over the CSX mainline railroad tracks. It would connect the Airborne and Special Operations Museum with the stadium, providing convenient additional parking. Jones tells Up & Coming Weekly that plans for restoration of the Prince Charles Hotel will go forward regardless whether the ballpark is built.