N.J. city is buying back a vacant downtown hotel with hopes of giving it a new life

The City of Trenton is getting back into the hotel business, sort of.
The state has awarded the city a $4 million grant to buy the one-time, city-owned Marriott hotel on West Lafayette Street that nearly 25 years ago was pegged as the crown jewel of downtown redevelopment, but later fell into vacancy.
Then Mayor Doug Palmer’s administration conceived and built the 197-room hotel and adjacent parking garage, which opened to hype and fanfare in 2002. They city bonded the $60 million price tag, started a board to operate it and had Marriott book the rooms.
The city-controlled board later went bankrupt, and the hotel was auctioned off in 2013, later becoming a Wyndham, then briefly the Lafayette Park Hotel and Suites before state fire officials shut it down in 2017 for numerous violations.
In 2018, the state declared the seven-story building an unsafe structure.
Now, Mayor Reed Gusciora’s administration is going to buy it back, but they do not want to be in the hostel business. The city plans to take possession, pay off creditors, and when the final bond debts – currently about $2.5 million – are also paid off, sell it to a developer.
The city has planned a formal announcement on Tuesday, Nov. 26. The grant was awarded by the state Economic Development Authority.
Gusciora stressed Monday that the city buying the building is only to help drive it toward development.
The hotel is privately owned and when the city has tried to attract developers, they’re scared away by the price of buying, then having to renovate, Gusciora said.
The former owner, Edison Holdings, floated a sale price in 2020 of $8 and 17 million, which Gusciora said at the time was high.
(Edison Holdings acquired it at the 2013 bankruptcy auction, but the building later went into foreclosure and was acquired by a bank, the mayor said. It’s now owned by LW TRENTON II LLC.)
The grant is a game changer, Gusciora said.
“This will enable us to purchase it and then what we intend to do is issue an RFP [request for proposal] and this will enable a developer to purchase it and take it off our hands and then use all the money to renovate the hotel,” the mayor said.
The mayor sees a likely $1 resale to a developer, allowing the city to basically flip the property.
It will also allow the city to control the redevelopment, like requiring the building be used as a hotel, and have a restaurant and entertainment. And plans call for market-rate residences on the top floor, “which we’re all in favor for,” the mayor said.
Gusciora said his administration believes the hotel was too big, in terms of rooms, and housing is likely more profitable to a buyer.
“So, what we intend to do is purchase an abandoned building,” Gusciora said.
“We have no intention of owning it, operating it or it being called the ‘City Hotel,’” he said with a chuckle.
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Kevin Shea may be reached at [email protected].