In January 2021, it was exciting to read Elks Building to Become Luxury Boutique Hotel re: Kessler Collection’s purchase of the historic Elks building and its plans to develop it into a Bohemian-style 40 room luxury boutique hotel. Discussing the downtown project, CEO Richard Kessler stated, “By restoring this iconic landmark in the hub of downtown and adding another key historic preservation project within the collection, the dynamic growth furthers the luxury hotel collection’s position as a discernable leader in the boutique lodging industry.”
Like many others, I would like to know, in addition to the hotel, what is the “key” preservation project that is being added within the collection? What is this new vision he is “excited to watch come to life?” When will the public see what his vision is, and, most of all, what impact it will have on our downtown? The Board and city staff did see a visual presentation of Kessler’s vision in a closed session in early September, however the general public remains in the dark.
And, unlike the public’s support and involvement in the 40-year downtown revitalization effort, there is no indication this lack of transparency will change under the current city leadership. That conclusion is based, in part, on the following sampling of some of the correspondence and actions that have/are taking place.
The secrecy and lack of transparency began months before the sale of the Elks building was announced. Correspondence in early August, confirm Mayor Outlaw and Alderman Bengel supported Kessler’s goal of acquiring the waterfront park lot and plans were well underway.
In William Atkinson’s September 1, email to the City Manager Foster Hughes, he wanted to know where things stood as Richard Kessler’s goal “is to incorporate all three projects into our overall development plan; Elks Temple, a mid-priced product for the city lot, and then a world class waterfront hotel and park redevelopment (Union Point Park) for the convention center. We’d do them in three phases, starting with the Elks building.” In a follow-up email on September 7, 2021, he wrote, “Thank you for your call today … Richard’s thoughts were: We will be investing $60-$80 million into the park to make it a truly world class park with world class amenities.” A November 4 email, … moving forward with a MOU for the Talbot site and the Riverfront site … need contact/help with learning to see if can purchase the Train Station.”
In early July, Aldermen Bengel and Odham and City Manager Hughes met with NC Railroad officials in Raleigh, renewed the lease for the train depot for five years, and purchased the .23-acre vacant lot at the corner of Hancock and South Front Street (directly across the street from city property, leased by the Farmer’s Market) for $227,000, recorded 11/8/2021. When asked why, Alderman Bengel said, quote, “for parking.” Eight months have passed and there has been no plan to improve that lot or any public discussion about it. Will this be another public giveaway to Kessler?
On August 5, Steve and Alderman Sabrina Bengel (Ward 1) and CC Tourism Development Authority (TDA) board member, the TDA Ex. Director Melissa Riggle, Swiss Bear Executive Director Lynne Harakal, and Mayor Dana Outlaw went to Savannah, stayed in a hotel in Kessler’s Plant Destination District met with Richard Kessler and company to continue their on-going discussions.
During her January 7, City Talk show, Bengel told the audience, Mr. Atkinson would be joining them when she knew he wouldn’t be. She described a 200’x200’ parking deck with a hotel wrapped around it. These three women (who visited Kessler’s property in August 2021) also raved about a luxury waterfront hotel overlooking the city. Bengel happily said, “We got the deal done.”
The agenda published the Friday before the February 8 Board of Aldermen meeting included Item 11. Consideration and Approval of MOU (Memorandum of Agreement) between Kessler and the city. Great controversy ensued that weekend when the public learned the park and Talbot lot give-away was on the agenda. Outraged citizens showed up at the meeting and spoke against the city’s support of Kessler’s plan to redevelop Union Point Park. The Swiss Bear, Chamber and TDA exec’s comments supported Kessler’s investment in downtown and the low-wage, hospitality jobs (with little or no health benefits) it would create. After hours of testimony, criticizing the secretive process the board ultimately voted to approve the MOU.
When Kessler became aware of the controversy, Kessler issued a statement, “The Kessler Collection has decided to withdraw our interest in potentially adding a boutique hotel over-looking Union Point Park in New Bern. We regret that misinformation about this project derailed the planning process and that we did not have the opportunity to fully engage with residents and stakeholders in New Bern.” However, to this day the city has not provided an opportunity for Kessler to fully engage with stakeholders and residents, what it means to the city, what it means for the future of New Bern, how it will benefit all New Bernians, or how citizens will be engaged in this significant development that will permanently change downtown New Bern.
In a January 6, 2022, email, Bengel asked William Atkinson, Kessler’s right-hand man, to be a guest on her show with Lynne Harakal and Melissa Riggle to talk about the Elks Building. Atkinson responded, “We discussed this with our PR group and they asked if we could wait a week until our press releases come out first.” Bengel ignored the Kessler group’s advice and talked about downtown development and Richard Kessler anyway.
In Savannah, GA, their City Council approved Kessler’s request and issued $33 million in bonds to finance construction of the 500-space parking garage, encased within a luxury hotel building (half of the spaces reserved for the public). Will this shady MOU signed by the Aldermen eventually require the city to pass a similar bond to sweeten the Kessler Deal? There is little doubt that will come next, and all taxpayers of New Bern will be required to pay to further enhance the finances for a handful of downtown property owners. If that day comes, will Kessler even pay our local contractors for any work they perform? It is a valid question. On levelset.com, a site that assists smaller contractors and suppliers in getting paid, the Kessler Collection has a payment score of 75/100 earning a C grade in South Carolina, which ranks them in the bottom 20% of Property Owners.
The only reference in any TDA minutes (July 2021 – May 2022) is in January 2022. “Kessler bought the Elk’s building with plans for 40 rooms, and expect it to open May 2024.”
Swiss Bear Director Lynne Harakal sent this April 20 email to downtown retail business owners. “I’ve received a request from the Kessler folks to provide retail sales numbers in our central business district. Would you be willing to share your year-end sales numbers for 2021? I would need the information ASAP.” Why?
No doubt, Swiss Bear, New Bern Area Chamber of Commerce, Craven County Tourism Development Authority execs and the Downtown Business Council chairman are aware of Kessler’s plans, and know there is much to be gained, especially for major downtown, business and property owners. Those who remain in the dark and stand to lose the most: everyone outside a three-block area of City Hall, every retailer and small business that doesn’t fit within Kessler Collection’s model, and the citizens of New Bern.
Many of Kessler’s projects include destination districts that link their waterfront hotels, high-end retail shops, and high-energy entertainment venues together. Is Swiss Bear, the Chamber, TDA and Business Council’s goal to establish a similar social district with weekly street closings that will link to the waterfront hotels and parking deck(s)?
When will the city’s lack of transparency end? When will the public have the opportunity to fully engage with residents and stakeholders in New Bern and hear what Kessler’s vision is, and what additional projects are he and the city “excited to watch come to life?” Why is the city and an out-of-town developer making all the decisions for the future of our historic downtown, and only a few select people know anything about it?
Under the current leadership, it doesn’t appear any answers will be forth coming.
By Susan Moffat-Thomas, retired Swiss Bear executive director