Fordson Hotel (formerly 21c Museum Hotel)

[Pete]

I've heard it may get a Hyatt flag, which would be great.


Really sad about this, however. 21c and the related art collections were super cool and unique.

But the handwriting has been on the wall for a long time.

[goldenHurricane22]

Was actually scheduled to meet with 21c next month to discuss doing a hotel block there for my wedding at the end of this year--reception is at Farmer's Public Market, so this seemed the most logical since they offered a shuttle to/from the venue for special events. Plus, as Pete said, it's a cool and unique place, and with 100+ of the guests on the invite list never having set foot in Oklahoma, would have been a cool place for visitors. Will be curious to see how the new management maintains or changes the place, although I am guessing I'll be hearing later today about canceling the meeting and rescheduling once the switchover officially happens. Would likely still be nice to end up having a hotel block at the new iteration.

[Plutonic Panda]

That is a huge bummer. Even if they get a Hyatt flag, that still be a downgrade in my opinion. I stayed at the 21C one time and that was one of the coolest hotel experiences I’ve ever had. I’ve stayed at several different Hyatt some while they are nice, they are nearly as cool as the one we just lost.

[chssooner]

Since 21c was purchased by Accor, you'd think they all we be rebranded. Or is it just the OKC one?

[Urbanized]

…Really sad about this, however. 21c and the related art collections were super cool and unique...

On one hand I agree, as the art curated by 21C has been a pretty excellent array of notable contemporary works.

But on the other hand the anticipated (and forehead-slappingly-obvious) connection to the FJJMOA is pretty tantalizing. Fred Jones Jr has the most impressive permanent collection in the metro, OKCMOA and Oklahoma Contemporary notwithstanding. They have a pretty significant collection of contemporary art in their own right, but they also have one of the best collections of the Santa Fe School outside of Santa Fe, a very impressive trove of indigenous art, and the largest and most valuable grouping of French Impressionism ever gifted to a public university (Weitzenhoffer Collection).

It’s easy to imagine rotating, themed displays from FJJMOA that might be far more impressive and varied than those of 21C, and that’s truly saying something. We’ll see how it turns out, but it’s legitimate to think that it might turn out to be an upgrade.

[Pete]

Yeah, on the surface this seems like a bummer but the truth is that place has been really struggling since it opened.

Whatever comes next is almost certain to draw more business and be more robust.

[UrbanistPoke]

I've talked to 21c's development team under Accor and they won't build new 21c's that have less than 150-200 rooms anymore. The scale of hotels is important especially when you have additional costs like running art exhibits/security involved. The OKC hotel was just too small to operate at the scale it needed to, not that there was anything inherently wrong with the project or the OKC market. If there had been space to expand the hotel they might have done it.

I stayed there once, loved it, but wouldn't stay there again. Would rather stay somewhere that's a bit more connected into downtown this was still a bit too far walking wise to everything else. The parking was really annoying too. I paid to valet the first night and they parked my car on the street - if I'm paying that much I expected it to be in the parking garage across the street where there would be less risk of it being broken into/damaged in anyway. I'm not lazy enough that I couldn't self park if I had known that and did the rest of the time I was there. The room rates were also fairly uncompetitive - primarily due to scale of the hotel and it's kind of a self eating thing when that happens. They had to charge more to cover operations and maintain the level of stars they had plus hotel standards for the brand and thus made themselves much more expensive than competitive properties that frankly have a lot better locations (Colcord, etc.). If it had an extra 50 or more rooms you can decrease the rates more to market and spread your costs out more. I know it seems odd but that's the way it works. Scale in commercial real estate is very important and takes new brands a while to figure out what works and what doesn't.

[Urbanized]

Thanks for posting that good description of economy of scale, which affects all commercial real estate ventures. It is one of the calculations most often left out of conversations on this site, and certainly helps differentiate between posters here who have a business background vs those who do not.

[soonerguru]

I stayed once during one of our weather apocalypses. The room was already in dire need of maintenance and was too industrial, in my opinion.

The restaurant space is incredible but the new bar is fairly ho-hum.

Joie de Vivre is a boutique brand owned by Hyatt and would be a great fit for this property.

I think this property could also benefit from more recognizable exterior signage — perhaps something neon-inspired on the roof?

[Pete]

Thanks for posting that good description of economy of scale, which affects all commercial real estate ventures. It is one of the calculations most often left out of conversations on this site, and certainly helps differentiate between posters here who have a business background vs those who do not.

Scale may be a factor in the 21c business model but even in terms of hotels in the core, there are many successful operations that are about the same size or smaller and almost every other hotel in the area (as in hundreds) is close to the same size. The Colcord, Ambassador and Aloft all have fewer rooms.

Also tons of successful small-scale housing (every bit of the Midtown Renaissance stuff and countless more examples) and hundreds of small office buildings and shopping centers.

Economy of scale only applies to very specific situations and in fact, a minority of projects.

[UrbanistPoke]

Scale may be a factor in the 21c business model but even in terms of hotels in the core, there are many successful operations that are about the same size or smaller and almost every other hotel in the area (as in hundreds) is close to the same size. The Colcord, Ambassador and Aloft all have fewer rooms.

Also tons of successful small-scale housing (every bit of the Midtown Renaissance stuff and countless more examples) and hundreds of small office buildings and shopping centers.

Economy of scale only applies to very specific situations and in fact, a minority of projects.

Economies of scale is applicable to EVERY commercial real estate project lol. That is the entire basis of an investment model to understand how to make the most return on an investment. So no, not a minority of projects - every project in every asset type of real estate.

I'll clarify that scale can mean different things in different sectors of commercial real estate too. Multifamily for example - best operating scale is usually either under 25-50 units or 175 - 300 units. Small properties can operate at scale because you can hire third party management who can source any R&M, turnover, etc. Once you get above 50 units you typically need to hire full time staff but the only way to distribute out that cost appropriately to make the most return on investment is to distribute out that cost amongst the most units without needing to hire more staff. Properties that have say 100 units tend to operate significantly less efficient - doesn't mean they can't be profitable but it also creates lots of challenges. Typically that means they might have to charge more rent per unit to cover operating costs and typical return rates than a property across the street that has 200 units and the same staff/operating costs.

Hotels are the same. A small hotel or Airbnb can operate pretty successfully at scale that way, if you're small enough you don't have much overhead but when you get to a certain number of rooms it requires on-site staff, etc. especially for 4+ star properties that require significant amounts of staff even during evening/nights. Same for very large hotels if they are built too big - reason why Omni needed subsidy is because in most markets that scale of hotel is not efficient to build that big and to operate, but it serves a need for a city to have such a facility. Aloft and 21c are no where comparable in economics of operations - the right scale for an Aloft is what they built and build around the country. Under 4 star hotels have a vastly different scale to operate successfully and 3 star hotels are typically much smaller in total room count than 4 star or higher for a reason. The reason Colcord is more successful is because it's location (and Devon also subsidies it for a long period of time which was not something 21c could compete against either).

You can make scale work at any level if there's enough demand and location is perfect, but if you have competitors in better locations and you are not at a proper scale for your business model you are going to fail much more easily. 21c needed to be built larger, however when it was originally built 21c was still somewhat of a newer brand and it's a learning curve to figure that out. Doesn't mean a hotel can't be successful in that location, just needs to be a different flag and operating partner. One that isn't as expensive to operate and thus be able to drop the room rates to be more competitive in the market space. It's pretty common to see the room rate for 21c be twice as much as Colcord, Skirvin, Ambassador and those are all in better locations and just as nice of quality rooms.

[Pete]

Economies of scale is applicable to EVERY commercial real estate project lol. That is the entire basis of an investment model to understand how to make the most return on an investment. So no, not a minority of projects - every project in every asset type of real estate.

What you are actually discussing is cost/benefit (i.e. return on investment) not economies of scale.

Sometimes too much scale has a negative impact on the bottom line.


Plus, this property was a renovation and thus constrained on the number of rooms. Thus, if that size model doesn't work for 21c then that was a bad investment on their part not some sort of lack of understanding of 'how things really work' on this site.


My point is that there are plenty of hotels (indeed most) that went through their development pro forma and decided on a scale that is smaller than 21c. Economy of scale by definition means that the bigger/more you build, the more incremental profit.

Profit is discussed in virtually every development thread.


Anyway, we are all saying the same things just in different words. I just get prickly when someone trots out the "this site" generalization because it's almost always unfair. I was mainly addressing Urbanized, not you UrabnistPoke.

[warreng88]

To be fair, the hotels that are doing well that are smaller in downtown OKC are also a part of much larger flags. Colcord (Hilton), Ambassador (autograph by Marriott) and aLoft (Marriott). Not to mention the number of Hilton or Marriott hotels in the US versus 21C.

[Pete]

To be fair, the hotels that are doing well that are smaller in downtown OKC are also a part of much larger flags. Colcord (Hilton), Ambassador (autograph by Marriott) and aLoft (Marriott). Not to mention the number of Hilton or Marriott hotels in the US versus 21C.

Except for Aloft, neither of the others had a national flag when the first opened and they operated successfully for years without one.

So what will happen now is that the new operators will seek a flag that will bring to bear massive booking infrastructure and demand.

[chssooner]

Would love for this to be a Hyatt Centric brand. However, those tend to have a lot of meeting space (at least the ones I've stayed at). So maybe not that, but anything except a Hyatt Place would be fine.

[TheTravellers]

I'm guessing Mary Eddy's will still be around in some incarnation or other? I don't know enough behind the scenes to know how much they were affiliated with 21c....

[UrbanistPoke]

What you are actually discussing is cost/benefit (i.e. return on investment) not economies of scale.

Sometimes too much scale has a negative impact on the bottom line.


Plus, this property was a renovation and thus constrained on the number of rooms. Thus, if that size model doesn't work for 21c then that was a bad investment on their part not some sort of lack of understanding of 'how things really work' on this site.


My point is that there are plenty of hotels (indeed most) that went through their development pro forma and decided on a scale that is smaller than 21c. Economy of scale by definition means that the bigger/more you build, the more incremental profit.

Profit is discussed in virtually every development thread.


Anyway, we are all saying the same things just in different words. I just get prickly when someone trots out the "this site" generalization because it's almost always unfair. I was mainly addressing Urbanized, not you UrabnizedPoke.

I mean call it whatever you want but it's all the same underlying issue of making the most money you can and return enough capital to investors that they stay happy.

Yes, they were constricted to the building footprint and I fully believe when they built the project they felt like the number of rooms, etc. made sense. Turns out that years later that wasn't the case and is why the 21c brand has pivoted to a certain room size count on any new projects. It happens, doesn't mean anything overall negative about Oklahoma City or that particular spot. It will work and operate just fine under another brand that has less overhead to operate and likely being connected to one of the bigger US brands will help too. For business travel that location is just a few blocks too far west from the main office towers downtown especially compared to Colcord and others. This site needs a flag more geared toward leisure, etc.

If the apartments hadn't been built around it, they could have expanded the hotel with additional rooms but that wasn't a reality they could do once they figured out the property was just not big enough for them to operate that brand efficiently. Instead they increased the asking rates per night to try to cover those costs and ended up pricing themselves out of the market - you can't survive as a hotel in a less ideal location than your competitors and try charging 2x the nightly rate they do - you will fail at that business model.

[Pete]

^

Really do appreciate your insight.

Interestingly, they could have easily added more rooms even within the constraints of that property because ADG leases a good chunk at the west end (and they could have built above that as well) and they could have expanded to where the pool is now because they've never really had a good use for that space. Also, the apartments came as part of the same ownership and development and that could have been reworked, so I'm sure you're right that didn't adequately plan in the initial development.

[Pete]

I will say again that this will likely prove to be a blessing in disguise.

21c was a failure as a business. They were never busy, they had to completely reconfigure the restaurant space because it didn't work (far too much space for the previous setup) and generally failed to reach its potential. It was super cool to walk through the exhibits but the lack of business at the hotel was depressing.

A national flag that keeps that place booked will have a very positive impact on that area and lead to more businesses and development.

[soonerguru]

Interesting that business travel was what the ownership was going for. Seems to be an odd fit for that.

[UrbanistPoke]

^

Really do appreciate your insight.

Interestingly, they could have easily added more rooms even within the constraints of that property because ADG leases a good chunk at the west end (and they could have built above that as well) and they could have expanded to where the pool is now because they've never really had a good use for that space. Also, the apartments came as part of the same ownership and development and that could have been reworked, so I'm sure you're right that didn't adequately plan in the initial development.

Sure thing - I don't remember how many years ago they opened but I believe they used historic tax credits on the hotel portion/ADG's space too. So they likely couldn't have expanded without causing issues with the tax credits. I think I remember seeing they used New Market Tax Credits too. The recapture period is likely expired on all of that now but likely too far down the road for them to look at doing something like expanding the hotel footprint, etc. At some point you just have to throw in the towel and let someone else do something different with the property. It'll be better served long-term to have a different brand in there like you've said as well.

[Pete]

^

I thought the issue is that you had to maintain the historic structure but could build an extension as long as was distinct, ala the way the Colord was expanded.

At any rate, I don't think they understood the need to have more rooms with this opened and I'm not even sure that would have made a difference anyway.

I'm very grateful to them for taking a chance on what was no-man's-land at the time. Sometimes it's better to be the 2nd business in a space.

[UrbanistPoke]

^

I thought the issue is that you had to maintain the historic structure but could build an extension as long as was distinct, ala the way the Colord was expanded.

At any rate, I don't think they understood the need to have more rooms with this opened and I'm not even sure that would have made a difference anyway.

I'm very grateful to them for taking a chance on what was no-man's-land at the time. Sometimes it's better to be the 2nd business in a space.

The developer still made plenty of money off of it all.

Historic tax credit wise it really depends. Many times you can't add anything that touches the exterior or even blocks the view of the exterior - it all depends on who you're talking to at the state and their 'interpretation/judgement' of what you can and can't do to any specific site. The likely reason that alley way between the historic building and new apartments is as big as it is, is likely because they were required to have so many feet as a buffier and 'view' cone of the historic building. Also likely why the parking garage to the south doesn't have a direct connection to the building either. The historic people can be really frustrating to deal with and a lot of it is left up to their own judgement and what they apply to one site isn't always the same to another.

I'm working on a project now that they have told us we can't put any infill/new construction on the site because it would block the view of the property from a nearby highway - mind you a highway that didn't exist when the building was built and didn't for decades. None of it usually makes any common sense to be honest when you're dealing with historic tax credit work. They are very, very picky about what can and can not touch the exteriors of buildings especially if you're doing new construction next to it or in combination to a historic building. They can and will came after the developer if down the road you alter anything, they can make you repay all of the credits. I think it's a 5 or 10 year restriction period, but after that you can do whatever you want.

[Richard at Remax]

I like to do stay cations every now and then and this always slipped through the cracks. I'm primarily a Marriott customer, but will always look at Hilton and Hyatt properties. I think having a flag with any of those three would be very beneficial. Perhaps autograph collection from Marriott

[LakeEffect]

I like to do stay cations every now and then and this always slipped through the cracks. I'm primarily a Marriott customer, but will always look at Hilton and Hyatt properties. I think having a flag with any of those three would be very beneficial. Perhaps autograph collection from Marriott

Isn't the Ambassador already an Autograph Collection? Doubt we'd get a 2nd one of those flags.

While I'm a Hilton guy, having a nicer Hyatt in OKC would be good for business travel and Hyatt loyalists. We don't have any of their nicer flags...