'Hidden issues': Yorktowne Hotel price tag nearly doubles to $40M; reopening delayed

Rebecca Klar
York Dispatch
Construction continues on the Yorktowne Hotel Wednesday, Feb. 6, 2019. Costs to renovate a historic York City hotel have nearly doubled since the project was announced in April 2017. Bill Kalina photo

Costs to renovate the historic Yorktowne Hotel have nearly doubled since the project was announced in January 2016, and developers are searching for ways to cover the additional expense. 

York County Economic Alliance officials now estimate the York City project will cost just shy of $40 million, nearly twice the initial $20 million estimate. 

Developers had hoped to reopen the Yorktowne Hotel this summer. That date has been pushed back to late spring 2020, said Jack Kay, chairman of the York County Industrial Development Authority.

That is if things go according to plan, he said, adding a caveat that they rarely do. 

The project is funded in part by a $10 million state grant, which requires $10 million in matching local funds. The authority received an additional $2 million in supplemental state grant money, Kay said. 

As for covering the additional costs, "we're still working that out," said Kimberly Hogeman, project manager for the York County Economic Alliance, which works with the authority on redevelopment. 

"We're probably seeking $6 (million) to $8 million of additional capital that could come from a number of different sources," Kay said. 

The York County Industrial Development Authority, a government entity that focuses on redevelopment projects in the county, bought the Yorktowne in 2016. The authority also owns York Revolution's PeoplesBank Park.

The authority is made up of board members and doesn't have employees. It has a contractual agreement with the York County Economic Alliance for the alliance to provide staff services for projects, including the Yorktowne. 

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No local city or county money will go toward the Yorktowne Hotel project, Kay said. The only public funding comes from the grants. The project is also approved for state and federal historic tax credits. 

Developers are eyeing philanthropic supporters, private investors and additional grants to make up the shortfall. 

"We have a very strong philanthropic community who wants to see this done right, so we continue to talk to some donors as well," said Blanda Nace, YCEA's director of strategic development.

'Hidden issues': The initial projection was based on an early scope of work that "has changed pretty significantly," Kay said. 

The $20 million hike stems from unanticipated structural issues in the century-old building, officials said. 

"Any time you get into rehabilitating or renovating an old building, there's a lot of hidden issues you didn’t know until you start tearing off walls and taking down ceilings," Nace said.

Engineers are seeking cost-saving measures when viable, Nace said. For example, rehabilitating old elevators instead of replacing them is now on the table. 

"We really are striving to make this a top-notch, almost once-in-a-lifetime (project)," he said. "You do this once every 100 years, so, to do it right and to do what people expect, this is a long-term, high-quality construction project."

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York City Mayor Michael Helfrich was understanding about the pace of the project.

"We’d like to see it get done as soon as possible,” he said of work on the downtown landmark. But he acknowledged it’s an expensive project and “things don't always go the way you want.”

Plans: In May 2018, it was announced the hotel will join the Tapestry collection by Hilton when it reopens. Plans include 121 guest rooms, including two floors of suites, a rooftop event space and a full-service Market Street restaurant and cafe. 

The project also will modify traffic patterns, allowing for a rear drop-off circle leading directly to the hotel lobby. The land development plan was approved unanimously at a Tuesday, Feb. 5, York City Council meeting.

The traffic changes do not contribute to any cost increases, Hogeman said. 

Construction continues on the Yorktowne Hotel Wednesday, Feb. 6, 2019. Costs to renovate a historic York City hotel have nearly doubled since the project was announced in April 2017. Bill Kalina photo

Traffic modifications will benefit handicapped and elderly patrons, Nace said. It eliminates a 6-foot difference between the street level and the hotel.

The plan also includes an agreement with the York County Administration Center, commonly referred to as the "old courthouse," to connect the two lots, Nace said.

"We will be able to use their driveway so you can turn directly into the hotel off Market Street," he said, adding the new traffic pattern will decrease confusion for out-of-town guests.

— Rebecca Klar can be reached at rklar@yorkdispatch.com or via Twitter @RebeccaKlar_