The folks who seek to revitalize The Hotel Blue just west of downtown Albuquerque are using a novel source in the effort — crowdfunding.
Los Angeles-based ARRIVE Hotels & Restaurants announced plans in August to redevelop The Hotel Blue at 717 Central Ave. (aka Route 66) and rebrand it as ARRIVE Albuquerque.
The Albuquerque Journal reported on ARRIVE’s unusual way to raise capital:
To fund the ambitious urban renewal project, ARRIVE struck a partnership with the investment platform NextSeed and is hoping to raise $6 million to renovate the midcentury hotel, about one-fourth of the project’s estimated price tag.
The approach to funding is common in the technology world but relatively unproved in the world of Albuquerque real estate. Still, Youngro Lee, CEO of NextSeed, said the funding gives local investors an opportunity to invest in developments that are closer to home than most tech startups.
“We found that a lot of people … would rather invest in something in their own backyard,” Lee said.
According to the NextSeed page where ARRIVE launched its crowdfunding campaign, it’s raised $280,000 as of Monday night — meeting its minimum goal of $100,000 — and has 78 days to reach its goal of $6 million. The entire project for The Hotel Blue is estimated at nearly $25 million.
Investing through NextSeed requires a minimum of a $5,000 investment. Those who invest will receive a one-time hotel credit of $250 up to $1,000, depending on the tier of money involved.
The Journal also reported:
In this case, Lee said the campaign is open only to investors who meet the Securities and Exchange Commission’s criteria for accreditation. Investors receive equity in the project, and can eventually expect a return on their investment. In the case of the hotel, distributions are made to investors first, before the fund manager receives disbursements.
ARRIVE Albuquerque wants to restore the hotel’s exterior to its original look from its 1965 opening as the Downtowner Motor Inn. It also will renovate the hotel’s 135 rooms and, add more modern furniture and other upscale amenities. The ground floor also will be revamped and include a new bar and a coffee shop. A pool and bocce ball court will be part of the outdoor courtyard.
ARRIVE hopes to reopen the hotel by 2021.
As for the crowdfunding, it will be interesting to see how well this goes and whether other owners of vintage Route 66 motels might consider it to revitalize their properties.
(Artist’s rendering of a revitalized The Hotel Blue, aka ARRIVE Albuquerque)