This article was originally published at the Detroit Free Press website, authored by JC Reindl and can be found at the original page here
After a downward journey from grandeur to budget hotel, the former Dearborn Hyatt Regency is seeing business improve under its newest owner and his vision to someday return the property to international premier status.
The 773-room behemoth — the second largest hotel in Michigan after the Renaissance Center’s Marriott — changed names again this year and is now The Edward Hotel and Convention Center. It is named for current owner Edward Gong, a Chinese-born businessman who lives in Toronto. He owns Chinese-language television stations and has started a fledgling chain of Edward Village-branded hotels, according to hotel employees.
Land records show that a Gong-affiliated corporation bought the crescent-shaped hotel for $20 million last January in the latest in a string of recent ownership changes and management shakeups.
The previous owner, Israel-based Royal Realities, acquired the hotel out of receivership in 2011 after another previous owner, Dallas-based Ashford Hospitality Trust, chose to default on the property’s mortgage during the recession. The past owners were unwilling or unable to make tens of millions of dollars in renovations to the aging hotel, so Chicago-based Hyatt yanked its brand name off the property in 2012.
After losing the Hyatt flag, the hotel struggled to fill its massive outlay of rooms and convention spaces. It churned through at least two other names — the Adoba Hotel, the Royal Dearborn Hotel & Convention Center — and owners also experimented with $49-a-night doorbuster rates.
The property racked up negative online reviews and briefly operated without a liquor license. It faced the possibility of closure over unpaid property taxes and almost became a Radisson Hotel before the deal unraveled in the 11th hour.
Since Gong took ownership this year, the hotel has transitioned to an in-house management team and undergone some renovations and exterior improvements.It remains unclear precisely how much money Gong intends to pour into The Edward for renovations. .
A hotel official told the Free Press that upwards of $50 million in renovations is expected. However, Gong’s local attorney disputed that figure but declined to specify a different dollar amount.
“Mr. Gong has considerable resources, I will say that,” said Gong’s attorney James Cambridge of Kerr Russell in Detroit. “I have heard him say publicly that he is committed to returning this hotel to the greatness that it once enjoyed.”
So far Gong has upgraded thousands of lights throughout the building, brightened the lobby and touched up the landscaping. There have also been staffing changes.
“I would say that 95% of the front desk staff are new,” Zorn said. “There was definitely a culture not in tandem with any type of hospitality approach.”
The initial renovations also involve upgrades to the hotel’s out-of-sight infrastructure, such as aging plumbing. Subsequent phases will modernize public areas and the Rotunda ballroom on the 16th floor; transform the convention center ballrooms into high-tech event spaces, and ultimately renovating the guest rooms.
The renovations could possibly involve re-purposing some of the 773 guest rooms into non-hotel uses, such as short-term corporate housing, Zorn said. That could help ease the challenge of filling so many beds each night in a building whose large size reflects the metro Detroit convention and hotel scene of the 1970s and 1980s.
The property boasts over 64,000 square feet of meeting space, including the top-floor Rotunda featuring 360-degree views and a revolving floor.
To liven up the hotel’s exterior at night, Gong this winter had blue neon lights installed across the roofline complementing the lights and colors of the nearby Ford world headquarters. He is now looking into the possibility of mounting a large video-capable display board atop the Rotunda, similar to the new display outside Detroit’s Cobo Center, Zorn said.
“It will be seen for miles and miles around,” Zorn said.
For local officials and those in the hospitality industry, any significant renovation is welcome news after years of under-investment and an overall decline in quality.
“Historically, as a Hyatt, this was the premier convention hotel for the city of Detroit,” said Chuck Skelton, president of Ann Arbor-based Hospitality Advisers. “And once they lost that (Hyatt) flag, it started to tumble, tumble, tumble.”
A particularly low point was hit around 2013, shortly after the property lost the Hyatt name, when hotel staff was told that they lacked a liquor license and therefore had to hand out drink tickets and shuttle guests and conventioneers to a restaurant in nearby Fairlane Town Center.
“We were driving them over to the mall to drink,” recalled longtime hotel employee Diane Tinney.
The Edward is currently the third hotel in Gong’s Edward Village chain after two midsized hotels in the Toronto area that he bought. A fourth and fifth hotel could join the group if Gong closes deals in Orlando and Niagara Falls, Canada.
Besides hotels, Gong has several Canadian real estate projects and owns two TV stations in Toronto, including the Chinese-language Canadian National TV, Zorn said. This year, Gong also bought the former Motorola corporate campus in Illinois, which could become future production space for his health product company, called 024, that currently sells in China.
Dearborn Mayor Jack O’Reilly said he has met Gong and conversed with him through an interpreter. According to the mayor, Gong first learned about the former Hyatt’s availability during a past trip to metro Detroit to scout the former Holiday Inn of Southfield. That shuttered hotel eventually sold to a New Zealand-based investment group that reportedly will reopen it as a Best Western Premier.
“He seems realty sincere about wanting to have a first-class hotel,” O’Reilly said of Gong’s vision for The Edward. “Structurally it’s still a very sound hotel. It has a very useful life in it, it just needs some upgrades.”
The Dearborn hotel opened as the Hyatt Regency in 1976 and immediately wowed visitors with its futuristic design and towering lobby. It was developed by Ford Motor’s real estate arm at a reported cost of $40 million and connected to Fairlane Center mall via a Ford-built monorail that ran until 1988. Plans to extend the monorail to Ford’s nearby world headquarters never came off.
The hotel also once featured a helicopter landing pad, a feature that Gong is considering bringing back, Zorn said.
Skelton, the hospitality industry consultant, said Dearborn’s Hyatt was once very popular with convention visitors and used to draw considerable business from Detroit Metro Airport travelers. But much of that former clientele now stays at The Dearborn Inn, The Henry, the airport’s Westin or in downtown Detroit.
Before Gong, the occupancy rate at the hotel after losing the Hyatt flag was often 20% or lower, Zorn said.Occupancy is now around 28% on weeknights, rising to 68% to 70% on weekends, he said. The hotel will completely sell out a few times each year, such as during the North American International Auto Show.
The hotel has stopped offering deeply discounted room rates since Gong took over, once as low as $49 a night. The walk-up rate is currently $109 to $119 a night.
“There is a balance of finding the right rate that’s going to fill the hotel and that’s high enough to attract the clientele that respects the hotel,” Zorn said. “In the past we lowered that rate so low that it attracted, quite frankly, a demographic that didn’t respect the place.”
The property’s event business has been on the upswing this year and is about double what it was in 2015, Zorn said.
The success of the hotel’s rebound may ultimately depend on the scope of Gong’s financial commitment and scale of his renovation plan.
“I’m glad somebody bought it who has good intentions and really wants to make it the landmark it should be,” Skelton said. “Hopefully this guy will have enough money to bring it back.”