Santa Rosa's new Hotel E seen as downtown kick-starter akin to Napa's Archer hotel

How can the arrival of a high-end hotel help shape the revitalization of a city’s tired downtown district?

For Napa, the answer is already clear: The November 2017 opening of Archer Hotel Napa has proven to be key to anchoring the city’s rejuvenated downtown.

For Santa Rosa, the verdict won’t be in for a while.

However, traction will get underway next month when the city debuts Hotel E, its first-ever boutique hotel, to be situated in the centerpiece of downtown: Old Courthouse Square.

“I think it’s huge for Santa Rosa and I think it’s huge for downtown,” said Peter Rumble, CEO, Santa Rosa Metro Chamber. “I can imagine that hotel will be close to full occupancy a full part of the year because it’s a beautiful building, has a number of high-end amenities and features, and it’s unique to Santa Rosa. There’s no other hotel of that caliber in the market.”

Located in the Empire Building at 37 Old Courthouse Square, Hotel E will open to guests on July 1, marking the completion of the first phase of the two-phase project, according to project developer Hugh Futrell Corporation and Greystone Hotels, owner and property manager.

The Empire Building portion of the hotel will be the first phase to open and include The Enology Lounge, a combination wine bar, living room and lobby, approximately 1,000 square feet of divisible meeting space and 39 guestrooms, according to Greystone. Room rates will start in the low-to-mid $200 range per night on a weekday, and in the low-to-mid $300 range per night on weekends.

The second phase of the hotel, in 19 Old Courthouse Square next door to the Empire Building, is slated to open early next year. It will have an additional 30 guestrooms and two suites with private decks, a large public courtyard, a roof-deck café overlooking Old Courthouse Square, a fitness center and additional meeting space. Plans also call for a Starbucks and the first Wine Country location of Perry’s, a family-owned San Francisco-based restaurant and bar, according to Greystone.

The Hotel E project is Greystone’s first in Sonoma County, said Eric Horadas, founder, CEO and president of Greystone Hotels, which has a portfolio of 12 hotels consisting of a mix of boutique and branded properties.

It was Hugh Futrell, CEO and co-shareholder of Santa Rosa-based Hugh Futrell Corporation, who contacted Greystone about teaming up on the project.

“We picked Greystone because of their success as an independent boutique hotel operator and owner, and their reputation for strong business ethics and precision in what they do,” Futrell said. “My company is very careful who we partner with and our partnership with Greystone has fully met our hopes.”

Horadas said he and Futrell’s views are well-aligned about the new hotel for Courthouse Square. Horadas said he sees downtown Santa Rosa as “an attractive proposition” for developing a high-end hotel.

“We look for high markets with high-demand drivers,” Horadas said. “We see a continued influx in tourism to Wine Country and saw a hole in Santa Rosa. There’s no product like this.”

Rumble agrees.

“People now looking for that level of experience are going to Healdsburg or Sonoma,” Rumble said. “It’s not to take away from those destinations, but adding to our overall ability to serve that market and for Santa Rosa to be in consideration for that market. People looking for a bigger city experience in Wine Country will now have that in Santa Rosa.”

Horadas also said the ongoing growth at Charles M. Schulz-Sonoma County Airport, the SMART train, and the walkability to downtown restaurants from Courthouse Square added to the reasons he thought putting a luxury hotel in downtown Santa Rosa would make sense.

And he is confident Hotel E will elevate downtown Santa Rosa in a fashion similar to how Archer Hotel Napa has boosted its downtown.

“If you look at downtown Napa 10 to 15 years ago, it was dead. Everyone went to St. Helena, Yountville or Calistoga. With the Archer, it’s now a hot place,” Horadas said. “It’s the same thing in downtown Santa Rosa. It’s ready to be discovered.”

Archer Hotel Napa, which opened in November 2017, is the anchor of downtown Napa. The hotel was part of the First Street Napa project, a 325,000-square-foot overhaul started in 2013 that transformed three blocks of downtown.

“There has always been a draw and so much that is attractive about Napa Valley as a destination and an industry hub. However, in the early 2000s, few recognized the potential of the City of Napa,” said Mike Daood, president of LodgeWorks, which developed, owns and operates Archer Hotel Napa.

LodgeWorks also was the developer for the AVIA Hotel (now Andaz), which opened in downtown Napa in 2009.

“Our role was not to transform (downtown), rather to work within the framework, character and history that Napa already provided,” Daood said.

The five-story Archer has 183 guest rooms, including 39 balcony-clad suites, an open lobby on the ground floor that integrates a lounge and bar with the Charlie Palmer Steak restaurant, the Sky & Vine Rooftop Bar, and views of Napa Valley.

Since opening, the hotel has contributed almost $2.9 million in occupancy tax, as follows: $44,000 in 2017; $1.9 million in 2018; and $946,000 to date for 2019, according to LodgeWorks.

Daood said he believes the hotel’s success will continue to help drive potential tenants into First Street Napa.

“For Napa, I think there are a variety of actions that helped to positively impact reinvestment in the downtown area and certainly hotels are a part of that,” said Robin Schabes, Napa economic development manager. “I think the Archer as an anchor absolutely has been a catalyst project for that section of downtown.”

Like Archer, Hotel E may also serve as a catalyst for the longer-term economic growth of downtown Santa Rosa.

“I think it’s kind of a symbiotic relationship with the hotel there that provides a stronger retail base,” Rumble said. “And as that retail sector grows on Fourth Street and around the area, it will attract more housing and hotels.”

Rumble also pointed out that some of the storefront vacancies in downtown “shouldn’t be assumed to be permanently empty. There is a planned tenant and some tenant improvements that need to take place,” he said, though he declined to elaborate.

Horadas said downtown Santa Rosa has something that its downtown neighbor in Napa doesn’t.

“Santa Rosa is a legitimate business destination,” he said. “(It) has a fairly diverse business environment that also has a demand for hotels (and that’s why) we’re putting a fair amount of meeting space in the new hotel.”

Downtown Santa Rosa may very well become a gateway city for Wine Country travel, as Horadas envisions.

“I think in a few years, Santa Rosa as a tourism destination will be looked at just like downtown Napa.”

Staff Writer Cheryl Sarfaty covers tourism, hospitality, health care and education. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.