How Marriott's Delta brand is kickstarting the convention biz in Allen, Texas

Delta by Marriott in Allen, Texas

Allen, Texas, a town of approximately 94,000 citizens located 26 miles from Dallas, languished without a proper convention hotel for years until area developer Alterra approached Marriott International about a plan for just that. Now the town is next in line to receive a Delta by Marriott property of immense size, giving Marriott’s Canadian brand a flagship hotel in the U.S.

“From a big-picture perspective, we are seeing more new-build opportunities for Delta than we expected initially,” said Paul Loehr, VP, lodging development West region at Marriott International.” We see tremendous opportunities for the brand in markets in locations such as Allen.”

According to Loehr, the site was attractive to Marriott for a number of reasons. First of all, the hotel is connected to the upscale retail and corporate development Watter’s Creek. Second was the size of the site, which is spread across seven acres of land. This frees up the development to include an outdoor courtyard for seating, 90,000 square feet of event space and ground-floor retail outlets. Once the property opens late 2018, the 300-room hotel will also have an upscale restaurant, bar, pantry and outdoor pool.

The Delta brand originated in Canada, and was founded in 1962 by William Pattinson in Richmond, British Columbia. Marriott sought Delta to secure a better foothold in Canada, and acquired the company from a subsidiary of British Columbia Investment Management in March of 2015 for roughly $130 million. Now, 36 Delta hotels can be found across the U.S. and Canada. 

New Digs

Mike Kennedy, partner at Alterra, developer of the hotel, said Alterra commissioned industry analysts at HVS to investigate the Allen market for opportunities before approaching Marriott, and the resulting plan for the hotel was so well received by the local community that the Allen Convention and Visitors Bureau is relocating inside the hotel. 

The Allen CVB will have 2,000 square feet of space to set up inside the property. Kennedy said that Benchmark Hotels & Resorts signed on to operate the property, and will be in direct contact with the Allen CVB to promote the facility in tandem.

“Part of what makes us unique is that 40,000 square feet of event space, which is suitable for indoor karate events or private concerts,” Kennedy said. “You can host a trade show there during the stay and also book out a central courtyard for later that night, and the area is all very walkable.”

The Delta brand has its roots in Canada. Pictured: The Delta by Marriott Ottawa City Center.

Dan Bowman, executive director/CEO at the Allen Economic Development Corporation, said he always knew there was room for a 90,000-square-foot development in the area, and set out to create a unique asset that would stand out. The process to develop the hotel kicked into gear when Alterra entered into a public/private partnership to use public dollars to complete the property’s financing, with Alterra putting up $15 million and seven acres of land as well as $6 million in EB-5 financing, sourced primarily from China. The rest of the hotel’s financing came from IBC bank.

“We worked closely with Alterra on financing,” Loehr said. “The total project cost came out to $90 million, which is never easy to get a hold of. There were some challenges with the financing, but Alterra pulled it off expertly.”

Convention Push

Bowman, on the hunt for good ideas and impressed with HVS’ report on Allen, was amazed at the city’s multiyear loss report tracking conventions lost to other nearby regions. The decision to relocate the Allen CVB directly inside the hotel came after Bowman met CVB head Karen Cromwell, who convinced him of her commitment to win back those conventions.

“In smaller cities you will find a CVB with a government background, but Karen has more than 20 years of experience in hospitality on the private side, and they will do a huge bulk of the work to get those conventions coming back to Allen,” Bowman said.

Bowman said Alterra is also considering pedestrian connectivity in the property’s development, with brick pavers and lights being installed to encourage a more natural pedestrian flow. This, Bowman said, is being done to accommodate hotel guests’ access to nearby retail at Watters’ Creek, as well as a new office building going up directly next to the property, the first step in a separate 1-million-square-foot plan for the corporate park.

When asked how he feels about the direction the development has taken, Bowman points to years of research and a multitude of dedicated parties attached to this project, and counts it as a win.

“You won’t find too many projects out there where the government goes public/private on something that won’t make sense,” he said. “If the market didn’t demand it, we wouldn’t have incentivized building it.”