A planned revival of a century-old hotel property in Petersburg is several hundred grand closer to getting underway after a funding assist from the governor’s office.
The restoration of the old Hotel Petersburg is slated to get going in earnest early next year, fueled in part by a $600,000 grant awarded through the Virginia Department of Housing and Community Development’s Industrial Revitalization Fund.
The grant was one of four awarded for 2022 through the fund, which uses local and private resources to support redevelopment of deteriorated industrial structures in the state. A similar amount was awarded to another hotel project, a planned conversion of the old Blackstone College for Girls in Nottoway County.
The Hotel Petersburg grant adds to funding being positioned for the $13 million project, which was announced last year as initial work to prep the building got underway. A development team led by Petersburg native Nat Cuthbert is behind the effort, which so far has involved pre-construction remediation work, plaster and paint repair, and window replacements.
The team is working with city government and Retro Hospitality, a Richmond-based consulting firm whose clients include Quirk Hotel. Retro’s Paul Cooper said the state grant will provide a form of bridge financing as the team works to secure a bank loan for the project.
“It’s helpful as part of the overall capital stack,” Cooper said of the grant. “We are working toward a loan committee review with the bank in December, and we expect the project to be funded either late December or early January, depending on their review,” Cooper said. He declined to name the bank since the loan is under review.
Upon a loan closing, Cooper said, construction would commence immediately, initiating a project that’s expected to last 15 to 18 months. He said the hotel’s opening is targeted for late summer or early fall of 2023.
The seven-story building at 20 W. Tabb St. would be revamped as a 65-room hotel with a restaurant, bar, banquet room and street-facing storefronts. The building, which dates back to 1915, last operated as a hotel in 1969. The property has been dormant ever since.
Cuthbert, a radiologist who with his brother Charlie converted the former Union Trust Building at 200 N. Sycamore St. into the 42-unit Courthouse View Apartments, purchased the Hotel Petersburg building in late 2017 for $500,000. Cuthbert has put his own money into getting the project going.
Cooper said the development team is reviewing construction documents and pricing from three firms that are vying to serve as contractor on the project. The team has switched architects and is now working with Scott Gordon of Richmond-based The Yellow Room. Thomas Hamilton & Associates is the interior designer.
Berkadia is sourcing financing for the project, with Costa Canavos serving as mortgage broker. The renovation also will involve state and federal historic rehab tax credits.
The hotel is expected to create 60 full-time and 40 part-time jobs, according to the grant announcement from Gov. Ralph Northam’s office. Petersburg Mayor Samuel Parham is quoted in the release, describing the project as “essential to the revitalization of Petersburg’s Downtown and Old Towne areas.”
“This boutique hotel will enhance tourism in the Petersburg region by elevating the visitor experience and will serve as a catalyst for new jobs and economic growth,” Parham said, adding that the city has developed a revolving loan fund that will assist with the project’s completion.
Parham will be discussing the Hotel Petersburg project and other initiatives driving the city’s economy and business trends in BizSense’s “The Future Of: Petersburg” event this Wednesday. Details on the virtual panel discussion are available here.