Marietta council denies proposal for low-cost apartments in Radisson Hotel

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Jul. 15—The Marietta City Council voted Wednesday night to deny a rezoning application that would have seen part of the Radisson Hotel at South Marietta Parkway and Interstate 75 repurposed into low-cost senior apartments marketed toward aging veterans.

The unanimous vote came after council members spent about an hour grilling the project's developer. Council members expressed concerns over the project's viability, the size of the proposed apartments, the amount of parking provided and other concerns. The discussion included a public hearing, but no citizens spoke for or against the project.

Had it been approved, nonprofit Veteran Services USA, along with Lockwood Development Partners, would have converted 80-90 hotel rooms into apartments, restricted to people aged 55 and up. About 125 rooms would have been left for continued hotel use. The city's Planning Commission recommended approval of the project last month.

Twenty percent of the units would have been at half the market rate, 55% would have been at 80% of the market rate, and 25% would have been at market rate, according to Richard Calhoun, the developer's lawyer.

Dan McNulty, representing VSUSA, said at last week's council work session that would likely mean monthly rates from the mid-$800 range on up.

McNulty explained last week that his company purchases struggling hospitals and hotels, converting part of the space to apartments and marketing them to veterans.

"For me, the things that I've done over my career in real estate, this is ... probably the most fulfilling and most exciting and the coolest ... That is more than just a real estate play," McNulty said.

Reducing the number of rooms in hotels hurt by the pandemic allow them to hit higher occupancy rates and thus become more financially viable, McNulty said.

"This is not an isolated event," Calhoun told the council. "This type of hotel conversion, there's several that's being done simultaneously around the country."

VSUSA also had plans to convert conference space to an adult daycare center and to create a kitchen through which restaurants could sell food.

As with a daycare for children, families with a live-in older relative could drop off their relative at the senior center while they go off to work. The daycare center could also have been used by the VSUSA tenants. The property manager would have provided a shuttle service for the facility.

The kitchen would have been a "cloud kitchen" or "ghost kitchen," differing names for a newer concept that has become popular during the pandemic. In such kitchens, "remote restaurants" sell takeout meals without traditional storefronts and dining space (meals from the kitchen would not have been included in the rent but would have been available to tenants, hotel guests and visitors; tenants would also have had standard cooking facilities in the apartments).

VSUSA and its partners has already purchased the 10-story Radisson building, built in 1985. VSUSA and Lockwood announced just days ago their purchase of at least nine properties nationwide including the Marietta hotel. The sales totaled roughly $225 million.

Councilwoman Cheryl Richardson asked McNulty before the council voted what would happen to the property should the rezoning be denied, to which McNulty gave no clear answer.

Council's concerns

In discussions at last week's work session, there seemed to be miscommunication that led some council members to believe VSUSA was providing relief to homeless veterans. McNulty sought to clear that up Wednesday by saying that VSUSA, by offering rental rates based on income, was seeking to fill a niche in Marietta — affordable housing for independent, older veterans on a fixed income. The kitchen would benefit local restaurants too, he said.

Mayor Steve Tumlin at the work session had become concerned that homeless veterans could arrive at the site expecting services, only to be turned away. McNulty on Wednesday emphasized that VSUSA supports the work of nonprofits assisting homeless veterans, but that the business model here was targeted at those who could afford to rent.

Councilwoman Michelle Cooper Kelly asked McNulty to help her understand the business model. What sort of hotel, she asked, doubles as a place with senior apartments for veterans, with an adult daycare center to boot?

McNulty assured her VSUSA was confident in the model, but later admitted to Richardson that VSUSA did not yet operate any comparable properties — partially converted hotels renting to senior veterans, that is.

"There's nothing for us to look at that says, you know, this model could work," Richardson said.

The fear among the council was that the project would go belly-up. The rezoning allowing apartment use in the hotel, in that case, would stay with the property.

"It's going to turn into an extended stay hotel," Councilman Grif Chalfant declared, which McNulty denied would happen.

Richardson also asked how many customers the daycare facility could accommodate, and whether it might run out of spots for apartment residents, since the daycare would be available to all. McNulty said he didn't anticipate that being a problem and that the daycare could be expanded — "that would be a great problem to have," he said.

The application had also sought approvals to keep the same number of parking spots at the hotel and to allow 350-square-foot apartments (city code normally requires apartments to be at least 500 square feet). Councilman Reggie Copeland balked at the size of the apartments. Kelly said more parking was needed and the apartment size was too small before the vote.

"I think that you definitely have a vision, you want to help," Kelly said. "But if I just look on the merits ... you've got a smorgasbord of businesses that's going on under this one roof."

Copeland also objected to the senior-only element of the apartments.

"That's a challenge for me," Copeland said. "It's almost like you're excluding a group of people."

McNulty countered by saying VSUSA operates other sites that cater to younger veterans, which include vocational training services. This project lacked the space for such services, he said.

"We can't do everything for everybody ... so we have to be segmented and targeted in how we do this," McNulty said, adding that younger people probably don't want to live in a facility made up of seniors.

"Would a 40-year-old Afghanistan vet want to live with 55-year-olds?" Copeland said. "My answer to you would be, hell yeah. They would want to live wherever they can get in."

Then there was McNulty saying the development would be a "shot in the arm" to the Franklin Gateway corridor, leading some officials to take offense at the suggestion that the area was blighted.

"I'd put it against ... Chicago any day of the week, as far as that being a good neighborhood," Tumlin said (McNulty mentioned he was a Chicagoan). "And I don't think slandering it was a very helpful way to approach it."

"All I'm saying is, when we put $10, $12 million more into that, we know that's a good investment," for the area, McNulty explained.

McNulty provided a statement to the MDJ after the meeting.

"Our unique plan to fully renovate and convert the currently distressed Garden Plaza Hotel in Marietta is to deliver an innovative and economically viable Radisson Hotel," the statement says, adding that "we are hopeful that the Mayor and Council will reconsider its decision affecting this much needed housing opportunity for our Senior Veterans living on fixed incomes."

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