BUSINESS NEWS
Coast River Business Journal
May 2021 • 3
Hotels a hot commodity,
despite developer argument
Story & Photos by Edward Stratton
Coast River Business Journal
estratton@crbizjournal.com
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Developer Mark Hollander made little progress
after being approved for two-year permits in Decem-
ber 2018 to build a four-story hotel along the Columbia
River in Astoria. In April 2020, he asked for a one-year
extension, blaming the coronavirus for making it nearly
impossible to finance construction.
But the city and other hotel developers have blamed
Hollander for his own lack of progress amid a regional
hotel market that, while momentarily shocked by the
pandemic, is still healthy.
Hollander wants to build a Fairfield Inn and Suites
for the Marriott hotel chain. The Astoria City Council
approved the large, rectangular building plans based on
existing code. But public outrage over how the devel-
opment might block views spawned an amendment of
city codes that would significantly shrink the height
and mass of the hotel if Hollander cannot secure an
extension.
Staff and the City Council have denied his appeals
for more time. The Oregon Land Use Board of Appeals
sent the denial back for a new hearing in April and a
deeper look at why the city didn’t buy Hollander’s eco-
nomic argument.
Financing unavailable
Hollander has presented several letters from com-
mercial lenders in June and July of 2020 talking about
the difficulty in getting financing, along with market
studies about the drop in room occupancy at the start
of the pandemic.
“When the bank says, ‘Look, we’re stopping con-
struction lending,’ you can’t build,” Hollander told
the City Council at the hearing. “Pretty much all of
hotels are built with lending, and are invested in with
lending.”
The city has argued that Hollander had 15 months
prior to the pandemic to make progress in a strong mar-
ket. Hotel construction in the U.S. hit an all-time high
in March 2020, according to data firm STR Inc.
“The staff’s position is that the economic conditions
of COVID did not start until one month prior to the
extension request, not during the previous 15 months of
the valid permit,” Rosemary Johnson, a planning con-
sultant for Astoria, told the City Council at the hearing.
A report in January by Lodging Econometrics
found that the construction pipeline for hotels was
down only incrementally despite the pandemic, a pres-
idential election and civil unrest. The number of proj-
ects and rooms grew each quarter in 2020 as the pan-
demic progressed.
Astoria pointed to two other projects — the
Bowline Hotel scheduled to open in June near
Buoy Beer Co. and the Hilton Home2Suites poised
to soon start construction near the New Youngs Bay
Bridge — as proof that hotel projects pushed for-
The Bowline Hotel near Buoy Beer Co. is scheduled to open in June.
ward through the pandemic.
John Ferguson, the Kansas City developer behind
the Hilton, agreed that the market was still ripe during
the pandemic for projects that had gone through
permitting.
“They’re not exactly jumping all over themselves,
but I had four lenders — real estate lenders — that defi-
nitely wanted to make loans to me,” Ferguson said.
“Once we get our foot through the permitting process
and get some finalized bids, we shouldn’t have any
trouble getting our financing.”
Tiffany Turner, owner of Adrift Hospitality and a
partner in Bowline, said the hotel’s financing had been
locked in before the pandemic but was frozen for two
months in spring 2020 by the lender Craft3.
“They said they did it to all of their current con-
struction projects, regardless of what industry they
were in,” Turner said.
But the financing had been reopened by June 2020,
and the hotel is nearly finished.
Hotels on the coast were shut down during the ini-
tial stages of the pandemic. But after reopening, cities
around the region reported strong performances over
the summer and fall from Seaside, Oregon, to Long
Beach, Washington.
“This has been one of our strongest performing
years, if you take out the two months we were actually
closed,” Turner said.
Hollander might have tipped his hand during the
April appeal hearing as to why he actually needed
more time. He relayed his concern over new, restric-
tive building codes created to prevent waterfront hotels
like his in the future. The new codes limit the height
and size of buildings, requiring view corridors to the
Columbia.
A pause
“As a developer, I have to take a pause,” he said. “I
have to think about, ‘Let’s let the smoke clear and see
what the city’s next move is in terms of changing the
goal post on the waterfront.’”
His comments helped sway the City Council to
again deny his appeal for more time. Astoria Mayor
Bruce Jones said there were a variety of reasons besides
the economics of hotels that made Hollander not move
forward on the project.
“And then the pandemic happened, and that was
kind of a good timing to have a reason to ask for the
extension,” Jones said.
Hollander had until late this month to decide
whether to appeal again to the state for more time on
his hotel.
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