Come 2018, Louisville’s skyline will change.
Work began today on the 30-story Omni Hotel and Residences. Now dubbed Omni Louisville Hotel, the high-rise will include 612 rooms, 70,000 square feet of meeting and event space, a pool/bar and grill on the lower rooftop, an art gallery in the lobby, a spa and fitness center, two restaurants, a speakeasy with four bowling lanes, a library and a 20,000-square-foot urban grocery and market.
The Omni Louisville Hotel will be topped with a yet-to-be-named 225-unit luxury apartment complex that will feature a private rooftop pool and access to hotel amenities.
“This is going to be a nerve center. It is going to be the center of our city,” said Louisville Mayor Greg Fischer. “Welcome to your new Kentucky home.”
Construction will take about two years, with the Omni slated to open in early 2018. Dallas-based HKS Inc. is the project architect; Alabama-based Brasfield & Gorrie is the general contractor; and Dallas-based Waldrop + Nichols Studio is the design firm for the project.
In addition to 765 construction jobs, The Omni will employ 320 people on a permanent basis. Wages will be competitive, said Mike Deitemeyer, president of Omni Hotels, adding that he could not comment on specific numbers or how many of the positions could pay minimum wage.
Unlike other companies, Omni doesn’t just build hotels or manage them, said Bob Rowling, founder of Texas-based TRT Holdings, which owns the Omni brand. TRT Holdings does both.
“We are in this for the long haul … so it’s important for us to build a property that we want to live with for a long, long time,” Rowling said. “We don’t have any check-the-box hotels. What that means is we spend a lot of time planning and understanding the culture.”
Rowling joked that Mike Deitemeyer already had been to every bar in the city doing research.
“We want to celebrate the history of Louisville with this hotel, and I think we’ve got it,” he said. “I think when you look at this thing, it is going to blow your socks off.”
Deitemeyer told Insider Louisville that Omni Hotels has been talking to local businesses about partnerships. For example, the company has talked to Heine Brothers Coffee about possibly serving its coffee.
Deitemeyer also has visited Louisville-based distillation equipment manufacturer Vendome Copper & Brass Works three times, looking for ways to work elements of copper and the alcohol creation process into the building, he said. “We’ve had a lot of conversations with a lot of people, and not a lot of that is defined completely yet.”
Rising construction costs
Although the longtime cost estimate was $289 million, Rowling said in his speech that the price of the Omni Louisville Hotel and apartments has risen to more than $300 million.
The design has gone through many iterations, which caused the price to rise. Originally, the building was going to be EFIS, a lightweight synthetic wall, but was changed to glass — a $5 million price increase, he said. The building also will be LEED silver certified.
“(The design) got better and better and better, and more expensive and more expensive and more expensive,” Rowling said. “We are going to put that money in happily. We feel like we are going to get a good return.
The city has awarded $139 million worth of incentives to TRT Holdings, and the parking authority is paying for a $17 million parking garage, as detailed in a previous Insider Louisville story. The state also has chipped in $90.5 million in tax rebates toward the project.
Rowling promised that the Omni would help draw people to Louisville. “We are going to bring new business here,” he said.
Metro Council President David Tandy said construction of the Omni bodes well for the city economy.
“You can always tell a city is on the move when you see cranes in the sky, when you hear the buzz of a saw, when you hear the rhythm of a hammer hitting a nail, and that’s what you’re starting to see here,” Tandy said. “This project gives us an opportunity of being transformational.”
The Omni will alter the downtown skyline, create additional housing downtown, open the first downtown grocery store and add to the restaurant scene, as well as set a standard for the inclusion of minorities and women in the construction process, Tandy said. TRT Holdings has committed to ensuring that 20 percent of its workforce are minorities and 5 percent are women.
If they want to compete, “all these other hoteliers got to step up their game,” Tandy said.
The Hyatt Regency on Fourth Street is investing $14 million in renovations to all 400 of its rooms to remain competitive and up-to-date.
Cost of living
The Omni has not set room rates for its hotel, and Deitemeyer said it is too early to comment on rental rates for the apartments.
“It will be on the higher end of the range,” he said, noting that the company doesn’t have a great sense of the demand for the downtown apartments the Omni in Louisville will provide. “We feel like there is some risk in it. At the same time, we feel the city’s ready for it.”
Fischer agreed that there is demand in Louisville for downtown housing.
“There are people moving into the urban core in cities all over the country, and you are starting to see that here with apartments going up and adaptive reuse of buildings,” he said.
The Omni shied away from building condominiums, Deitemeyer said, because of its lack of familiarity with the market’s housing demands. But “that is always an option in the future,” he said.
Across the street from the tent where the groundbreaking took place were protesters advocating for additional investment in affordable housing. One protester held a sign questioning the compassion of a city that backs luxury housing, yet lacks a needed 60,000 affordable housing units.
The protesters said they were turned away when they tried to enter the tent for the groundbreaking ceremony.
Mayor Fischer noted that the $139 million the Omni is receiving from the city is tax money that the hotel will generate. The Omni will keep the tax money rather paying it to the city.
“This project pays for itself,” he said. “It is a smart way to pay for a project.
Fischer added that he started the $12 million Louisville CARES initiative, which is dedicating more money to affordable housing than ever before.
“We need more affordable housing. I am sensitive to that,” he said, “but we want to make good economic investments like this that pay for themselves.”
‘A big, complicated project’
During their speeches this morning, Fischer and Rowling repeatedly stated how long the project had been in the works — three years — and that it had to go through a lot of steps before today’s groundbreaking.
“This is a big, complicated project,” Fischer said, later stating: “I never knew a clear block could look so beautiful.”
The Old Louisville Water Co. was not mentioned by name but was the most public hurdle that project cleared. Activists fought the city on the demolition of the Old Louisville Water Co. building, which sat on the future Omni site along Third Street between Liberty Street and Muhammad Ali Boulevard.
During the battle between activists and the mayor’s office, Jeff Mosley, deputy director of Louisville Forward, said that leaving the building could stop the Omni Hotel development. However, Andrew Caperson, Omni’s vice president of operations, told Business First that the company never considered walking away.
When asked if Mosley’s comments were simply a tactic used by the city to sway the outcome, the mayor said no.
“There was a cost difference of some tens of millions of dollars associated with having to keep the building there, and it didn’t fit into the structure” Fischer said. “They were confident that we were going to be able to work through that situation, and we were able to do that successfully.”
The Louisville Landmarks Commission ultimately declined to landmark the water company building — the last hope for the activists — and it was subsequently taken apart and stored for future reuse.