For years, developers have been dreaming of building a hotel on the site north of the parking garage at Patrick Leahy Burlington International Airport.
The last plan to build a five-story building with around 117 rooms failed last June, according to airport director Nic Longo. Early next year, Longo said, the airport hopes to receive offers from new developers who want to lease the land to build and operate a hotel there.
That most recent contract between the airport and two developers – collectively known as BTV Hotel LLC – set out certain financing requirements for the project to move forward. That contract expired in early June without the requirements being met, according to Longo, who said the developers decided not to renew it.
“At that point, the project didn’t make economic sense,” Longo said.
BTV Hotel LLC consisted of Colwen Hotels, which manages hotels throughout New England, and DEW Construction, a Williston-based company. The 60,000-square-foot hotel would have cost the group between $28 million and $29 million, “including permits, furnishings and interest” incurred during construction, according to Don Wells, CEO of DEW Construction.
Wells cited interest rates, which are at a 20-year high, as the main reason it “just isn’t working” right now.
“We don’t have a bank right now that would lend us the money,” Wells said.
The failed deal is just the latest in a series of attempts that never came to fruition. Officials have long recognized that Vermont’s largest airport needs a hotel where travelers can stay overnight – especially since many flights depart early in the morning or arrive late at night. But the project’s history has been marred by bad luck.
Efforts began in earnest in 2017, when DEW Construction first signed on to the project. At the time, a 104-room hotel was planned south of the parking garage, with talk of construction starting as early as early 2018.
The moment of optimism was short-lived. Objections from the Federal Aviation Authority to the proposed site led to the project being canceled in February 2020. Developers soon turned their attention to the property north of the parking garage, began submitting new permit applications, and set a groundbreaking date for summer 2020. A month later, the Covid-19 pandemic slowed air travel to a minimum, putting any thoughts of building a hotel on hold.
During seven years of failed efforts to build an airport hotel, DEW Construction had remained a constant, although two hotel management companies dropped out before Colwen Hotels stepped in in 2021.
Together, the two companies signed a contract with the airport as BTV Hotel that set out permitting, branding and financial terms that, if met, would trigger a lease. That contract — a so-called option agreement — expired on June 6, according to Longo, and shortly thereafter, he said, the airport received a letter from BTV Hotel stating that it was “not seeking an extension.”
“It was a really great relationship, a great partnership, right up until the end,” Longo said. “It came down to the bare minimum and the little things.”
He continued: “The economic viability of such a huge investment project has not proven itself for us this year.”
Nevertheless, Longo insisted that the dream of an airport hotel was “not over yet”.
“There is a great demand for a hotel at this airport. And there is a niche market for people who come from further afield to spend at least one night there,” he said.
Longo said the airport would “undergo a reassessment by the end of the year” and “hopefully” launch a public tender early next year, inviting new developers to “express their interest and present their companies.”
He pointed out that the airport’s role would remain the same: it would not support the project financially, but would simply offer “contractual lease terms” for “a developer and a management company that could accommodate a hotel in the north parking lot.”
While Longo acknowledged that other developers may face the same financing difficulties, he said the airport “has already received inquiries from other developers inquiring about the status of the project and the possibility of partnering with us.”
And, Longo said, previous partners are always welcome to re-bid. Wells confirmed that DEW Construction has been in talks with the airport about a new bid, but that it depends on whether the economic situation improves.
“I don’t know when interest rates will reach a point where it would work,” Wells said.
The fact that the north parking lot is still in a parking lot after seven years is “very disappointing,” Wells said, adding that there is nothing they can do but “wait patiently” for the Federal Reserve to lower interest rates.
Longo was a little more optimistic: “Disappointment? No, I wouldn’t say disappointment. This excitement, this opportunity is what I hold on to most.”
