When the historic Partridge Inn was sold this summer, the new owners took over a “tired” property in need of a financial boost.
The top bidders in an online auction, Atlanta-based Partridge Inn Holdings LLC immediately announced a $6 million renovation project at the five-story boutique hotel after paying $4.25 million for the asset in August.
Dating back to 1836, the iconic structure on Walton Way, though structurally sound, had water leaks, mechanical problems, aged furnishings and other issues that needed immediate attention.
The energy costs alone were upwards of $1,000 daily, said Greg Winey, president of NorthPointe Hospitality Management LLC, the new property management group.
Before the sale, the Partridge Inn had seen highs and lows. In the 1980s, the dilapidated building was gutted and rebuilt after being saved from demolition.
The property fell into foreclosure and years of financial uncertainty ensued despite a $5.6 million renovation in 2006.
“The Partridge Inn in and of itself has had good revenues over the years but not able to get the bottom-line dollars to pay the mortgage, the taxes, the insurance and the reserve,” said Winey, adding the new owners are required in the loan agreement to set aside about $200,000 annually for the “unknown.”
“Whatever contingency fund you have with a historic hotel, you better at least double, maybe triple it,” he said.
It’s sage advice for innkeepers and operators of old properties.
“They need to be able to expect the unexpected,” said Mary White, author of Running a Bed & Breakfast for Dummies. “Budget for it. Not panic and be able to move forward. Failure to plan and planning to fail. That’s a cliché, but it couldn’t be more true especially if you’re buying a historic property.”
White, who also is the founder and CEO of online bed and breakfast directory BnBFinder.com, said mistakes often happen when people fall in love with a particular property and fail to thoroughly investigate or heed the warning signs.
“You need to have a good financial plan, and you need to have a good budget,” said White, who listed upgrades to electrical wiring and HVAC systems as commonly needed in older buildings. “Spending a little bit of money in due diligence is either going to save their shirts or just save thousands.”
According to PKF Hospitality Research, the average profit margin in 2012 for historic hotels was 21 percent versus 24.6 percent for its contemporary counterpart. The firm, which compared luxury and upper-upscale hotels open before and after 1960, deemed inefficient operations that included higher departmental, maintenance and utility costs as the likely culprit for the contrast.
A local property with a financial history similar to the Partridge Inn’s is The Willcox in Aiken, although current owners Geoff and Shannon Ellis took over the boutique hotel without needing to make any substantial renovations.
The 22-room hotel, originally built as an inn in 1898, was expanded in the 1920s, ’30s and ’80s and saw its last major project to modernize the facility in 2000. Like The Partridge Inn, the property, condemned in the late ’70s, was saved from being torn down.
Since purchasing the full-service hotel from Garrett Hotel Consultants in late 2009, the couple has made minor changes like new paint and carpet as well as adding new TVs to rooms. The key to success, the Ellises said, is staying proactive.
“There’s always something being re-covered,” Shannon Ellis said. “There’s always new carpet going somewhere, something being painted. You have to be on top of it otherwise it can get the better of you.”
The couple acknowledge the costs associated with running an old property but don’t look at it as a burden. Rather, it’s a passion and chance to be maintain Aiken’s history, they said.
“We do put a lot of money back into this,” Geoff Ellis said. “Because it will ensure our future and its future.”
For Kenny and Rachel Franklin, owning Carolina Oaks Bed & Breakfast in downtown North Augusta is a labor of love.
“The hardest part is for people to find us,” Rachel said. “Over 50 percent of our guests have no idea they’re in South Carolina. They’re coming to Augusta.”
In 2006, the Franklins purchased a two-story historic home on Carolina Avenue and spent more than $100,000 in renovation costs to turn the former residence into an inn. The four-bedroom home, built in 1905, got ceiling fans, electrical outlets, two new bathrooms and the restoration of a third.
After jumping through hoops with the city of North Augusta to get the property approved for use as a bed and breakfast, Carolina Oaks opened to guests in 2008. Rachel Franklin serves as the innkeeper and Kenny continues to work at Savannah River Site. The couple also own North Augusta’s Sno-Cap Drive-In.
The inn is listed on an online directory, which has proved helpful for business, Rachel Franklin said.
Visitors have come from as far away as California and overseas, but most are travelers making a one-night stop on their way to another destination, she said.
“A lot of B&B’s have a two-night minimum, but we can’t do that at this point,” said Rachel Franklin, who described running the inn as a passion. “We want to get all the exposure that we can.”
Operating a historic inn is also a lifestyle choice for Jessie Chavis, whose dream has always been to own a bed and breakfast.
As the innkeeper of Isabella’s Bed and Breakfast in Johnston, S.C., Chavis has been living her dream since 2009, though not without hiccups.
Right after she and her late husband, Del, bought the 139-year-old Victorian home in 2008, a water line in between two floors burst, causing major water damage and ruining several of Chavis’ antique pieces.
Chavis said they were fortunate in that their insurance company paid for the majority of repairs.
Chavis has since opened the 4,500-square-foot home, which once served as a girls’ school dormitory among other things, as a venue for anniversary parties, meetings and small weddings.
Although traffic is on the lighter side, Chavis said she’s always full during Masters Week.
“Monetarily, it doesn’t support itself right now,” she said. “I have to put quite a bit of money into it to keep it going, but every year gets better. Every year, I do more business.”
At The Partridge Inn, which temporarily closed this month until March, a complete overhaul is underway of 144 guest rooms, bathrooms, hallways and the P.I. Bar & Grill. While the top two floors already have been gutted, a large portion of the $6 million will go toward repairing the bones of the property.
“First and foremost, you’ve got to get the guts right,” Winey said. “We’ll spend millions of dollars just getting that right and guests don’t see it. It’s not eye candy.”
Then, Winey said, the focus will turn to updating the exterior and modernizing the guest rooms and restaurant, while working to maintain the property’s quaintness. A second phase will start later in 2015 addressing the meeting space and lobby.
With nearly 80 percent of the property’s revenue generated in April during the Masters Tournament, a main goal is make the Partridge Inn just as profitable over the course of the year, Winey said.
After the renovation is completed, owners hope to elevate the hotel’s AAA rating to four diamonds and pursue affiliation with a major hotel brand to assist in keeping the property sustainable.