The trend toward adaptive reuse started in earnest when consumers began to tire of the cookie-cutter hotels popular in the 1980s and 1990s, said Jan Freitag, a senior vice president at the hotel data firm STR. There are more than 150,000 hotel rooms currently under construction in the U.S., up from a low of about 80,000 in 2009, just after the financial crisis. Using old buildings helps developers differentiate their products in a bustling market, and it may help hotels entice travelers increasingly lured to the more idiosyncratic experience of booking a room on Airbnb.
Developers willing to meet the building standards of the National Park Service can qualify for Historic Rehabilitation Tax Credits, which cover 20 percent of the rehab costs. Builders won preliminary approval for $6.6 billion of those tax credits in 2015, a total that covers residential and commercial projects. States commonly offer additional tax credits for historic rehabilitation.
“These days there’s a demand for differentiation, where hotels want to be unique and have personalities,” said David Schon, a Washington-based partner at the law firm Nixon Peabody who advises clients seeking tax credits for fixing up old buildings. “When hotels want to locate downtown in centers of cities, they tend to be old buildings with interesting architecture."
For the Embassy Suites project in Kansas City, a developer is planning to spend $149 million spiffing up a former Federal Reserve Bank building. There you'll be able to relax in ornate splendor amid the ghosts of central bankers. Surely that has its charms, if not an infinity pool.