FRANKFORT, Ky. (KT) - The Capital Plaza Hotel’s monopoly on downtown Frankfort is set to extend through 2030, the State Journal reported Saturday.
The hotel, which sits on state land, is in talks with the commonwealth to extend a non-compete agreement that prohibits the state from directly or indirectly engaging in the hotel business within a mile of the Capital Plaza Hotel, confirmed Marc Stone, president of the hotel’s management company, Stonebridge Hospitality.
Set to expire in 2022, that agreement is now listed as running through Dec. 31, 2030, in the latest draft of a deal between state and local government for how to redevelop the 6.4 acres of land where the Frankfort Convention Center and Fountain Place Shops once stood.
Max Allen, who owns the hotel with his wife, Lee, declined to comment on the details of the extended agreement until after state, city and county government officials approve the draft redevelopment plan for the so-called “Parcel B” land adjacent to the Capital Plaza Hotel.
“Everyone is waiting on the city and county to act and get this started,” Allen told the newspaper.
The plan, which has remained in draft form since late last year, also notes that the state is obligated to provide the hotel with 150 covered parking spaces contiguous to the facility on Wilkinson Boulevard.
The Allens bought the Capital Plaza Hotel — a Holiday Inn at the time — for $4.5 million in 2005. Since then, they have invested as much as $5 million in the property, Stone said previously.
Last year, the Allens publicly announced in The State Journal their intention to keep the Capital Plaza Hotel as a hotel amid speculation that ongoing Capital Plaza-area redevelopment would cause them to reconsider.
On Friday, Max Allen reiterated that stance.
“This is our home,” Allen said. “We’re not going anywhere.”
While their 99-year lease of the land on which the Capital Plaza Hotel sits doesn’t expire until December 2081, the Allens had a decision to make by 2022. That was the year through which they were contractually obligated to run their building as a hotel — with the benefit of a downtown monopoly.
After the monopoly expires, the Allens can convert their downtown facility into a different business if they give a year’s notice to the state, which has the right to buy the Capital Plaza Hotel building at its appraised value as a hotel.
The original language of the non-compete agreement says the state “shall refrain from directly or indirectly engaging in the hotel business by owning or operating a hotel, motel, or other lodging facility” that competes with the Capital Plaza Hotel in Franklin County and “shall not permit any real property owned or controlled by the Commonwealth within a 1 mile radius of the Hotel Building to be used for a hotel, motel, or any other type of lodging facility” that competes with the Capital Plaza Hotel’s business.
Since 2008, annual gross revenue at the Capital Plaza Hotel has fluctuated between $3 million and $3.6 million, The State Journal previously reported. The Allens also own Frankfort’s Best Western, Fairfield Inn and Hampton Inn, giving them control of more than 60 percent of the locally available hotel rooms.