The recent announcement of the closing of the Sheraton FourPoints on Wheeler Road is not good news for the taxpayer in Burlington. The question is whether or not this is an aberration or is it a sign of more difficult times ahead?
Along with the replaced Howard Johnson on Middlesex Turnpike this location was the primary hotel in the town up until the construction of the Marriot on Mall Road in the early seventies. The Howard Johnson was knocked down and replaced by a Barnes and Nobel more as a result of age and obsolescence of the property and a more profitable replacement than it was an indication of the health of the hotel business.
The FourPoints is a different story however. This is the at least the fourth operator of the property including Holiday Inn, Days Inn and Wyndham Gardens on the site. Those entities struggled economically on the site even when there was little competition in Burlington. In fact at one time the property was in receivership. The Renaissance just across the town line in Bedford also has had a spotty history with a number of former operators as well.
After a renovation rejuvenated the property back to a very nice venue it was thought that perhaps that and increased development in the town would enable it to flourish. A combination of factors however has doomed it apparently over the past several years.
The primary reason would have to be the glut of rooms that have been added to the town in the last decade. The local hotel tax was viewed as an easy way for the towns to generate additional revenue. When the owners of the High Voltage site came in with a proposal to build Summerfield Suites it looked like killing two birds with one stone. It would be an important element of rejuvenating the site and it would generate additional property and hotel tax revenue.
Shortly thereafter the development community and the town apparently felt that if one new extended stay hotel was good then of course three more would be three times better. So we then ended up with Candlewood, Homestead and Staybridge Suites. Not to be outdone and equally interested in the local hotel tax option Billerica soon quickly added two new huge facilities right on the town line with Burlington.
The effect so far has been the exact opposite of what was intended. Instead of generating more revenue it is likely to drive revenues down even further. The values of the properties have dropped and so to have the revenues from the hotel tax as a result of competition dropping room prices and occupancy levels. This drop in values along with a substantial rise in residential property values has contributed to the substantial shift in taxation from the commercial industrial sector to the residential community.The result has been back-to-back 8% tax increases for the resident over the past two years.
If the FourPoints remains vacant for to long a period and the economy remains at its current pace that will only add to the declining revenue problem for Burlington’s budget over time. More importantly is the question as to whether or not the property is in need of a change in use. Since retail use is the current zone which the developers feel will bring the highest speculative return can we expect an attempt to re-zone the parcel? Or are we likely to see an attempt to turn the parcel into a highly dense permanent residential use?
Is this a one time only situation that might be remedied by a new operator or is it a sign that we have over built in the hotel market and that other closings are likely to follow? If others are to follow it might bring to fruition one town meeting member’s prediction that the building of extended stay hotels was only a sham to circumvent local residential zoning and that the converting of these buildings to permanent, highly dense rental housing units was inevitable.
If indeed that is the case then it is important for the town to have a plan of attack in place to control this transition . Anyone paying any attention to the aging of the population in the country knows that as the baby boomers continue to enter their sixties and seventies more age restricted, congregate, assisted living and nursing home facilities will be needed. The town should be very careful to examine any zoning change proposal on the basis of the needs of the town as opposed to the development du jour.
