Two hotel developers now seeking Luzerne County funding

Two developers are now seeking Luzerne County funding for planned hotel projects in downtown Wilkes-Barre — one at the former Hotel Sterling site on the corner of River and Market Streets and the other in the Luzerne Bank building and adjacent former First National Bank building on Public Square.

Representatives of both are scheduled to make presentations to county council Tuesday at the first work session that includes five new council members on the 11-member legislative body.

H&N Investment’s request for $3 million toward a $37 million Gateway Hyatt Place Hotel and Conference Center at the former Sterling site already had been discussed at several council meetings, and a decision was deferred until the reorganized council was seated.

Now Bloxton Investment Group has emerged with a request for $2 million in county funding toward a 105-room “Tribute by Marriott brand” boutique hotel that includes a “high-end bar” and restaurant, according to information submitted to the county.

Called “The Hotel on the Square” in the presentation paperwork, the project is estimated at $23.8 million. Specifically, the $2 million in county funds would be used to acquire the former First National Bank structure from the city for $450,000 and restore and renovate that building primarily for dining, the paperwork and accompanying sketches show.

While the Sterling project’s past county funding request was $3 million, there had been some public mention of committing $5 million to ensure that landmark site has a befitting structure.

Funding source

Funding for the hotel project or projects would come from $6 million in community development funds that had been set aside in case the U.S. Department of Housing and Urban Development, or HUD, follows through with a $6 million penalty threatened a decade ago over a lack of development at the Sterling site.

With interest factored in, the county has $7.1 million in the bank, although it will be $6.675 million when the county executes a council-approved $425,000 loan to West Hazleton to complete a bridge project.

Some have argued the county should keep the $6 million intact unless HUD drops the threatened penalty, but the federal agency has not communicated any willingness to do so to date, officials have said.

Others have said using the set-aside funds on a project at the Sterling site would be the best way to clear up the disagreement with HUD because that project would address HUD’s original complaint that no development has occurred there.

When it became clear council would not be voting on the Sterling project allocation in December, H&N was advised to draft proposed funding agreement conditions ensuring the county would retain its money if the project did not go forward.

Developer representative Stephen Barrouk has said county funding is necessary to cover escalating costs stemming from the COVID-19 pandemic and inflation that remained after the project was scaled back. Debris from the 2013 Hotel Sterling demolition also had been dumped in the hotel basement, and that material must be extracted and hauled away for the new hotel construction.

H&N paid $700,000 for the land and is working to secure a $21 million loan toward the hotel/conference center, project representatives have said. The state committed $7 million in grants toward the project to date, and there also is a $225,000 contribution from Hyatt. That leaves a gap of about $7 million. H&N is pursuing additional state funding.

Under the plan, the five-story hotel would contain 116 rooms. and include more than 3,000 square feet of retail space. The section fronting River Street is slated to house a 5,000-square-foot event space that can accommodate 300 to 350 people for conferences, weddings, lectures and other events.

Public Square

Located next to the F.M. Kirby Center for the Performing Arts, the 14-story Luzerne Bank building was constructed in 1928 and is the city’s tallest structure, according to Bloxton Investment’s presentation.

Recognized for its Romanesque Revival style, the building’s design “draws inspiration from” York and Sawyer’s Bowery Savings Bank in New York City, it said. The bank interior “pays homage to the region’s coal mining history, with telamons in the form of coal miners offering support to the beams of the banking hall.”

The former First National Bank structure was constructed in 1906.

Michael Bloxton serves as a principal with Bloxton Investment Group, which purchased the Luzerne Bank building in 2022 through Big Public Square LLC.

According to the presentation:

The project will supply the equivalent of 60 full-time hotel/restaurant jobs and more than $1.8 million in local, state and federal tax revenue annually.

The structure will be “transformed into a modern hospitality venue while preserving its historic essence.”

It will include a state-of-the-art fitness center and business center.

“Adding to the allure is a versatile food and beverage offering in the lobby and combined First National Bank directly adjacent, with the capacity to serve up to 150 guests,” it said. “This area is poised to be a gastronomic hotspot, providing breakfast, lunch, and dinner, ensuring guests have a range of dining options without needing to step out.”

The presentation includes a photograph of Bloxton with city Mayor George Brown at a November press conference held to highlight Bloxton’s space technology plans as co-founder and CEO of Nebula Enterprise.

Council’s work session follows a 6 p.m. voting meeting at the county courthouse on River Street in Wilkes-Barre. Instructions to attend remotely are posted under council’s online meetings link at luzernecounty.org.

A vote would be required at a future meeting for any allocations to proceed.