Family buys historic Des Moines hotel, plans renovation

DES MOINES, Iowa (AP) - The first time Raj Patel stepped foot inside the Hotel Fort Des Moines, he knew he wanted to buy it.

"I walked into the lobby, and I could just see the potential," the 23-year-old son of an eastern Iowa hotel developer said. "At that moment, you could have told me the hotel was sinking at a rate of a foot a year, and I would have still bought it."

Patel's family bought the downtown landmark last week for $4 million through a subsidiary of its Burlington-based company, Hawkeye Hotels. It plans to begin a $40 million renovation later this year.

The project marks the intersection of two businesses on divergent paths.

The Hotel Fort Des Moines was the city's marquee place to stay for decades. It hosted presidents, celebrities and foreign leaders. But in recent years, it has suffered slow decline, attracting only a few guests a night and accumulating a growing list of needed repairs.

Hawkeye Hotels, meanwhile, has grown by leaps and bounds. It has more than tripled the number of hotels it owns in the past five years and has become one of the state's dominant hotel developers.

Earlier this week, Patel took The Des Moines Register (http://dmreg.co/1zCZbyA ) on an exclusive tour of the 11-story hotel, 1000 Walnut St., and detailed its renovation plans.

Construction will begin in six to nine months to refurbish the historical aspects of the first and second floors, while gutting the upper floors. Patel hopes to remove part of the second floor to expose the lobby's original two-story ceilings.

During the project, the hotel will close for the first time since it opened 95 years ago.

If all goes to plan, it will reopen in late 2016 or early 2017.

Hawkeye Hotels is negotiating to operate the hotel as a Hilton- or Marriott-brand property. Under Hilton, half of the building would become a Homewood Suites extended-stay hotel and half would be a boutique hotel called the Hotel Fort Des Moines. Under Marriott, the entire property would be a boutique hotel. It would retain the Hotel Fort Des Moines name.

"This is by far the biggest deal that I've been involved in, and in a lot of ways the most passionate," Patel said.

His parents, Bob and Angie Patel, got into the hotel business in 1982, two years after they emigrated from India. They saved their money to buy a roadside motel in Mena, Ark.

His father, 23 at the time, renovated the motel himself. His mother managed the books and cleaned the rooms.

The Patels later bought a hotel in Hannibal, Mo., and eventually built a Comfort Inn in Burlington.

That's where Raj Patel spent the first 10 years of his life. He lived in the hotel with his mom, dad and two siblings. Together, they managed the 50-room property without any other employees.

Raj helped at the front desk, cleaned rooms and even re-striped the parking lot.

By age 14, he was helping with the hotel's books. By 16 he was a front desk manager.

The Hotel Fort Des Moines had a notably less humble beginning. It opened in 1919 with 400 rooms, after local business leaders pooled their money, citing the need for a marquee hotel downtown.

At least 13 presidents have been guests, as have foreign leaders, musicians and celebrities.

In recent years, though, the hotel has seen fewer visitors. Only five to 10 rooms are booked on any given night, Patel said. The corner bar, Chequers, is closed except for special events. Entire floors, where the rooms are in disrepair, are off-limits.

On some floors, the ceilings are cracked and peeling. The carpet is worn and discolored. A common complaint is that the rooms are too small for modern tastes.

Jeff Hunter, the hotel's former owner, said things started going downhill in 2009. That year, he announced plans to renovate the hotel and stopped booking guests more than six months in advance of the start date.

But financing for the project fell through, and Hunter said he never recovered from the lost flow of guests.

During that time, Hawkeye Hotels grew into one of the biggest Iowa-based hotel developers.

Five years ago, the company owned 13 hotels. Today, it owns and operates nearly 50 and has an ownership stake in about 20 more, Patel said.

In the past two months, Hawkeye Hotels has bought seven hotels from Texas to Pennsylvania. The company, which two years ago launched its own contracting firm, Patel Construction, is currently building six hotels.

Driving the company's rapid growth is the next generation of Patels. Raj and his siblings - Ravi, 29, and Sajni, 30 - are all involved in the business, working on their own development deals. Raj Patel said his parents' hard work and success allowed the siblings to run with the business.

"We're very, very aggressive," he said. "We're very smart, and we know our business, I think, better than anyone else."

Ravi Patel developed the Residence Inn and Hampton Inn & Suites that opened in 2013 along the riverfront in downtown Des Moines.

Raj Patel was helping finish that project in the fall of 2013 when he first stumbled upon the Hotel Fort Des Moines. He had taken a break to get some coffee and walk around downtown, when he wandered into the building. He sat in the lobby Googling the hotel's history and admiring the marble staircase and walnut woodwork and thinking about the possibilities.

"It felt like the hotel needed some attention," he said. "It felt like it was begging to have new energy, a breath of fresh air come through it."

Other developers warned him against the project.

"There were a lot of folks who said this isn't the project for us, this isn't the project for Hawkeye now, this wasn't a project I should sink my teeth into," he said. "But when you see the building, when you walk around and get to know about the history, it was far too compelling to walk away from.

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Information from: The Des Moines Register, http://www.desmoinesregister.com