Should Swampscott Try To Bring A Boutique Hotel To Town?

SWAMPSCOTT, MA — An area that Swampscott Town Administrator Sean Fitzgerald said was "once the vacation capital of New England" could support a 40-unit boutique hotel in the soon-to-be-vacant Hadley School, according to the preliminary findings of a feasibility study commissioned by the Select Board.

Although no final determination has been made on repurposing the Hadley School once the new K-4 elementary school is finished and the Hadley becomes available for town re-use, the Select Board moved to pursue the feasibility of possible commercial use for the property at a meeting earlier this year with the boutique hotel one of three possible uses identified by a Hadley Re-Use Committee in a report offered in 2021.

Select Board member Peter Spellios said during Wednesday's meeting that the consulting group Pinnacle Advisory Group concluded that, in theory, the town could support a boutique hotel with details about the viability of a long-term lease and construction still to be determined.

"This is step one of what would be a multi-step process for us," Spellios said. "Step one is that there is a market and that there are top-line economics that, in the abstract, could support a hotel. The next phase that we talked about is taking this top-line revenue number if the Board wants to do so, and then we would have Pinnacle Advisory Group doing a tremendous amount more of financial analysis, including projecting revenues, including projecting development costs and including projecting operating costs.

"Costs to rehab existing buildings are not cheap, especially for hospitality," he added. "So this is step one. Step two is doing the feasibility analysis and step three is ultimately this Board making a decision whether or not to take this to town meeting."

The Select Board had leaned toward recommending commercial use during its last discussion in light of the subsequent purchase of the Hawthorne property, which Select Board members had expressed a preference to be preserved primarily or entirely as open space. While Spellios said on Wednesday that he would not recommend the property's direct revenue production for the town be the primary consideration in any vote to support it, that this option would provide a hotel tax and meal tax revenue and could provide increased tourism benefits for the town and nearby businesses.

"Hotel deals, particularly boutique hotel deals, are typically ones that are financially very difficult to make and it is not uncommon for a community such as Swampscott to end up doing some type of real estate tax deal to help finance the project and/or a reduced ground rent or something of that nature because the projects in and of themselves don't offer a lot of value in those respects," Spellios said. "What it does offer is the hotel tax — which is 6 percent of gross — so it's a very meaningful source (of revenue) which we should have every expectation of getting."

The Hadley Re-Use Committee had also proposed senior affordable housing as one of its three potential re-use options, while Select Board member Katie Phelan once again expressed her preference for retail with a community space.

"The last time we met on this subject we discussed going through with the feasibility study," Phelan said. "We did not vote on whether that was going to be the point of Hadley from this point forward. I actually expressed that I was not interested in even obtaining the feasibility project because I wanted to see a community center happen here. I wanted to see mixed-used commercial upstairs with a community center on the ground floor.

"So we're still in the process. No decision has been made here."

Spellios reiterated his concern that moving slowly on the re-use would result in Hadley being empty for a long period of time and urged putting a Hadley warrant article on the May town meeting warrant.

"It's going to take time," he said. "No matter what it's going to be, it's going to take time to do this. Even if we start (the request for proposal) process this summer, we wouldn't award an RFP by the end of the year, most likely, and then, frankly, by the time you negotiate contracts and everything it will be 2024 and Hadley will be empty in June of 2024.

"So it's really important for us to be deliberate and careful, and go through a deliberate process ... and keep the momentum here because we are all aware of, although before all of our times (on the Board), what happens with empty buildings and town buildings. They become an albatross and they become an impediment to doing anything in town."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.)