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KC minority partner sells stake in historic Hotel Savoy

February 10, 2017
  • Projects
As seen in the Kansas City Business Journal. Reported by Rob Roberts. (Feb 7, 2017)

Eric Holtze, a local hotel developer who began trying to breathe new life into downtown Kansas City’s historic Hotel Savoy and Grill eight years ago, kept that dream alive by taking on a majority partner in 2013.

Now, a partnership led by Holtze has sold its minority interest to that partner, Louisville-based 21c Museum Hotels LLC, which is transforming the landmark into 120-room boutique hotel with a fine-dining restaurant, event space and contemporary art museum.

On Monday, Holtze’s Savoy Acquisition Co. LLC closed on the sale of its stake in the building at 219 W. Ninth St. for an undisclosed amount of cash and title to the surface parking lot just east of the Savoy along Ninth Street.

Holtze’s partnership, which plans to sell the parking lot, was represented in the transaction by Whitney Kerr Sr., a veteran Cushman & Wakefield broker who represented the Savoy’s previous owner, Don Lee, in his 1965 purchase of the property.

Decades later, in 2009, Kerr introduced Holtze to the historic site.

Holtze and a brother converted an old bank building in Denver into a boutique hotel several years ago, Holtze said during a recent interview, and he decided to try another boutique hotel project in the Kansas City area after developing Holtze Executive Village Overland Park in 2000.

Initially, Kerr helped him look at sites on the Country Club Plaza, and after nothing suitable surfaced there, Kerr suggested that Holtze consider buying the Savoy from Lee.

He agreed, putting the building under contract in 2009. But the recession prevented Holtze from obtaining the necessary debt financing to buy and redevelop the hotel on his own.

So eventually, Kerr put Holtze together with 21c Museum Hotels, and civic leader Shirley Helzberg helped seal the deal by giving the Louisville firm a taste of Kansas City’s thriving arts community.

Kerr said 21c Museum Hotels founders Laura Lee Brown and her husband, Steve Wilson, toured the Savoy in February 2013.

“Shirley brought a plate of cookies, took them on a tour of the Kauffman Center for the Performing Arts, and they were sold,” said Kerr, who represented Holtze’s group and 21c Museum Hotels in their subsequent 2014 purchase of the Savoy.

With the purchase of the Savoy minority partnership stake, 21c Museum Hotels LLC now has completed refinancing plans with Junius Real Estate Partners, a subsidiary of J.P. Morgan.

McCownGordon Construction already has begun work on the $47.5 million redevelopment project, which is expected to result in the spring 2018 opening of the 21c Museum Hotel – Kansas City.

“Over the course of about five years, we put our heart and soul into bringing the old Hotel Savoy and the Savoy Grill back to life,” Holtze said. “We are thrilled to resolve our joint venture with 21c Museum Hotels in such a positive way.”

Built in 1888, the 110,000-square-foot Savoy building previously housed Kansas City’s oldest restaurant. The Savoy Grill was a popular stop for notable figures such as Presidents Harry Truman, Warren Harding, Gerald Ford and Ronald Reagan. The hotel also was noted for being the oldest continuously operating hotel in the United States west of the Mississippi River. Both the hotel and restaurant are listed on the National Register of Historic Places.

Soon before 21c Museum Hotels and Holtze's group closed on the historic property in 2014, it appeared that it might be history in another sense. An Oct. 23, 2014, fire gutted the Savoy Grill's kitchen. But the fire did not do any structural damage, so the sale proceeded.

"I saw the deal going up in smoke," said Holtze, who recalled rushing to the smoldering hotel scene. "But I was wrong. The thing we got lucky on is that the kitchen is completely encased in concrete, so the fire did not spread.

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