Hotel project gets extension

City officials confident about Marriott plans

City Attorney Hugh Campbell, left, explains reasons for the extension of a development agreement with Sunhouse Hospitality LLC, the hotel developer, during a meeting Thursday night. Also pictured are City Clerk Nicki Brame and Stan Farmer, city manager.

While the timeline for a project to bring a Marriott hotel to downtown Mount Airy has been expanded 12 months from the original schedule, city officials seem as confident as ever about it reaching fruition.

The Mount Airy Board of Commissioners voted unanimously Thursday night to approve an extended development agreement between the municipality and Sunhouse Hospitality LLC of Cary.

Plans have been in the works by Sunhouse since late 2020 to transform the large, four-story Sparger Building on the former Spencer’s textile mill property on Willow Street into the new lodging establishment. The plan also has included developing a market center nearby.

City Attorney Hugh Campbell explained during Thursday night’s meeting that certain “slippages” or delays have occurred which prompted the revised timetable.

“There are lots of reasons why,” Campbell said, adding that these have been out of the municipality’s control.

One has involved the time needed for state and federal review of a Sunhouse application for historic mill tax credits to aid the project, which act to preserve the existing architecture.

Another delay is linked to a tremendous amount of time needed to work with Marriott, which paid off with that chain’s decision to enter into an agreement with Sunhouse to locate one of its highly regarded Tribute hotels in the Sparger Building.

“This should be the first Tribute hotel in North Carolina and the first full-service hotel in Surry County,” local Main Street Coordinator Lizzie Morrison said during a presentation at Thursday night’s meeting on the overall progress of the Spencer’s redevelopment.

Morrison called the coming of the boutique hotel a “compliment” to the viability of downtown Mount Airy from Marriott’s point of view.

The apparently unavoidable delays have not dampened enthusiasm among local officials, according to Campbell.

“We still feel like we’re in a good partnership with these developers,” the city attorney said.

Under the revised timeline, initial work on the Sparger Building is set to occur in early 2023 to next summer.

General hotel construction by the local J.G. Coram firm and completion of site work is planned from the summer of 2023 to early 2025, with the lodging establishment slated to open in the spring of that year.

This will be a shining star for the Spencer’s redevelopment, which has been in the works since the former industrial property was bought by the city government in May 2014.

Officials confident

The Spencer’s transformation has experienced its share of ups and downs over the years, while achieving successes including the building of the 65-unit Spencer’s Mill Apartments adjacent to the Sparger Building which have a long waiting list.

And the extension of the Sunhouse development timetable for the hotel should not be viewed as a sign that it will meet the same fate as earlier plans for a Barter Theatre expansion and hotel on the property that were abandoned.

“It’s my understanding they have spent a sizable amount of money to get the Marriott franchise,” Mayor Ron Niland said Thursday night of Sunhouse, adding that this figure — required up front — is between $700,000 and $1 million.

“They’ve got quite an amount of skin in the game,” Niland added in regard to how a company would not abandon a project with such an investment having been made so far.

City Manager Stan Farmer agreed.

“With their signing of the agreement with Marriott, it almost guarantees they can’t walk away,” he said.

Even so, certain performance milestones have been inserted into the extended development agreement which Sunhouse is expected to meet before January.

These included lining up financing for the project and the completion of architectural drawings for the hotel.

The city attorney explained Friday afternoon that this is needed because the municipality will be doing some construction in the parking lot area near the building and officials wanted an assurance that Sunhouse will complete such steps before that work begins.

Sunhouse is scheduled to close next year on the purchase of the property it agreed to buy from the city for the project, according to the amended development agreement approved by city officials Thursday night, covering 36 pages.

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.