In the much-discussed -- and much-derided -- Forbes article christening Fishtown the “hottest new neighborhood in America,” developer Roland Kassis was a star character. The author rode with Kassis in his Range Rover, where he described how Frankford Avenue had grown over the last several years and hinted at a bigger change to come in a major hotel project he was going to finish. Kassis, the article stated, was about to break ground.
Three years now in the making, is that Fishtown hotel going to happen? Not soon, it appears. When pressed in a post-Forbes interview, Kassis revealed he was a long way out, actually not close to breaking ground.
“I need money, I need financing, I need plans,” he said. In fact, Kassis couldn’t start construction right away even if he were ready.
As of the end of April, according to Karen Guss, spokeswoman for Philadelphia’s Department of Licenses & Inspection, the variance granted Kassis by the Zoning Board of Adjustment expired because he did not apply for building permits for the hotel within a three-year window. He’ll have to apply for a one-year extension of the variance just to be able to get the building permits -- Kassis acknowledges he has not done so -- and then start work.
The difficulties are unusual for Kassis, who has dominated Fishtown’s resurgence. But neither he nor Fishtown has seen a project like the 125-room hotel he plans to build next door to Frankford Hall. The potential cost, perhaps more than $50 million, dwarfs the price for previous Fishtown developments and has put to the test whether lenders are willing to bet on Fishtown the same way they do the neighborhoods downtown.
“It’s a big project,” Kassis said, “and it’s in Fishtown. It’s not in Center City.”
About 20 years ago, Kassis started buying abandoned factories and breweries in the neighborhood, mostly on Frankford Avenue, and led their transformation into some of the most popular establishments in the city. He bought the buildings that became Frankford Hall, Fette Sau, La Colombe’s Fishtown headquarters, City Fitness, and Root, not to mention many residential properties. His latest high-profile project was the restaurant Suraya. It opened in late 2017 as a cafe, with dinner service beginning this spring.
Kassis, who declined to talk aside from a short phone interview, first unveiled plans for the hotel at a February 2015 Fishtown Neighbors Association meeting. It would feature 125 rooms, a rooftop pool, two restaurants, a banquet hall, and a jazz club to be built at 1224 Frankford Ave. and combined with an adjacent structure that would be turned into a coworking space, he said. The neighbors group voted overwhelmingly in approval.
The hotel would be similar to the 72-room, $32 million Wythe, a boutique hotel that opened in Williamsburg, Brooklyn, in 2012, Kassis said, he and got the same architect, Morris Adjmi, on board. But all that’s come to pass thus far is the continued blockage of the sidewalk at the Frankford Avenue site. Kim Miller, zoning chair for the Fishtown Neighbors Association, said the typical comment she hears about the hotel from local residents is “just get the thing built.” They’re concerned the building is an eyesore in its current state.
In the meantime, one hotel has popped up in Fishtown at Wm. Mulherin’s Sons, and another, Lokal, is planned by Postgreen Homes. The Wm. Mulherin’s Sons hotel, featuring four rooms, was voted the best new hotel in the country in a USA Today poll decided by hospitality-industry experts and general readers. Construction has already started on the Lokal hotel, on the 1400 block of Front Street, and Chad Ludeman, president of Postgreen Homes, anticipates it will be completed by fall. It will feature six units, the same as the Lokal hotel that opened in Old City last year.
Small hotels like those cost about $1 million. A 125-room hotel will likely cost tens of millions, vastly more than it took to redevelop any of the eateries and bars in Fishtown and many of the big apartment complexes. Postgreen Homes was able to self-finance Lokal Fishtown. The Kassis project requires a much greater investment -- and proof to investors Fishtown is ready for its first major hotel.
“I’d be interested in hearing what the market mix will be, [whether] they plan to have business travelers, leisure travelers, or who are their customers,” said Ed Grose, chairman of the Greater Philadelphia Hotel Association.
Though Fishtown has attracted a large number of young residents and visitors who have read about the neighborhood’s attractions in places like Vogue and Bon Appetit, it’s farther from the Pennsylvania Convention Center and office buildings than Center City hotels are. About two-thirds of travelers to Philadelphia come for conventions or business, according to Visit Philly data, though the leisure share of one-third is up nearly 20 percentage points since 1997.
Ludeman said he studied Airbnb stats through a service called AirDNA and found Fishtown to be one of the most profitable and busiest neighborhoods in the city. He believes banks are still looking at the history of Fishtown and concerned the popularity won’t last.
“They are a little bit less bullish into Fishtown,” Ludeman said. “That’s because they don’t see Fishtown, and they don’t care to understand it.”
Bart Blatstein, developer of the Piazza, among other projects, said financing is generally tougher to secure for hotels than for apartments or condos because they face greater vulnerability in economic down times. He once had a hotel project approved for 2nd and Poplar streets in Northern Liberties but never completed it, though financing wasn’t the issue. (“I got distracted,” Blatstein said).
Aside from the small hotels in Fishtown and the 22-room Conwell Inn by Temple University, hotels aren't a common sight north of Vine Street until you get closer to City Avenue. Blatstein sees the crowds bused from Center City to wedding venues like Cescaphe in Northern Liberties on the weekends and believes the demand for Kassis’s hotel is there.
“I think he’s going to wish he had more rooms,” said Blatstein, adding that he’s convinced Kassis will have financing locked up soon.
The clock is ticking. To get building permits, Kassis must apply for an extension on the variance. That extension would be good only until the end of April 2019. After that, if he hasn’t secured building permits, he would be back to Step One, and Fishtown would be far away from a boutique hotel.
“There are a lot of hurdles to do,” Kassis said, “but I’m going to make it.”