While Salem attracts around 1 million tourists each year and Beverly is developing a reputation as a restaurant destination, downtown Peabody is best known for frequent floods that have caused emergency evacuations and have forced people to wade through waist-high waters in search of higher ground.
Peabody Mayor Ted Bettencourt wants those images to go away. Over the last decade, the city has spent about $8 million to dredge, clean, and widen brooks to improve water flow under Peabody Square.
The city’s last major flood occurred in 2011, and now Bettencourt thinks the time is ripe to court developers to restore the square’s luster. To implement his plan to transform the downtown into a busy residential, retail, and commercial center, he has lured a major anchor: a planned $10 million hotel, including a restaurant replete with a martini lounge, just a few yards from City Hall.
“A lot of people had written off any success for the downtown. I don’t subscribe to that,” said Bettencourt, who thinks flooding in Peabody Square has been stemmed by the mitigation work, including construction of a $2 million underground retention pond this year.
Meanwhile, brothers Dan and Hany Bandar hope to begin constructing the planned 54-room Peabody Essex Hotel at the historic O’Shea Building in March. Built in 1907, the brick and limestone Colonial Revival was added to the National Register of Historic Places in 1980.
The Bandars, who own Middleton-based Bandar Development & Builders, bought the three-story building on Main Street for $1 million last year, and are planning to transform it into a hotel that will include a 4,000-square-foot restaurant on the ground level and an underground martini bar. It will be managed by Hay Creek Hotels — whose properties include The Exeter Inn in New Hampshire, The Orchards Hotel in Williamstown, and the Porter Square Hotel under construction in Cambridge.
“This property should do very well,” said Dan Bandar, who thinks the Peabody Square hotel will serve tourists headed to Salem and other North Shore destinations and business travelers who typically stay at Centennial Park or along Route 1. “There’s a big demand now for service-oriented, boutique-style hotel facilities.”
Bandar’s financing will be helped by a $250,000 city loan, to be paid back in 10 years. He also thinks the worst of Peabody Square’s floods have already occurred. Still, he’s taking precautions. “We’re going to totally retrofit the foundation to create a very water-resistant environment,” said Bandar.
He said the 18-month hotel project — which he hopes to conclude by the summer of 2015 — would create 50 temporary construction jobs. When it opens, he expects to hire 100 people to work at the hotel and restaurant. Bandar said each of the rooms would be around 300 square feet and be outfitted with Ethan Allen furniture.
Bandar also is planning to build three conference rooms for business meetings, and estimates that he’ll do much better than the 63 percent occupancy rate he’s targeted to earn a profit.
Other established hotels in Peabody include the Marriott off Route 128 on Centennial Drive; Extended Stay America, also off 128; and Homewood Suites by Hilton, Hampton Inn, SpringHill Suites, and the Holiday Inn, all on Route 1.
According to Karen Sawyer, Peabody’s community development director, the planned hotel and restaurant are expected to generate $200,000 in new taxes for the city each year.
While the idea of a cornerstone hotel in Peabody Square is a surprise to some, hotels graced the square for most of the last 200 years. In 1828, the Dustin Hotel was one of the major anchors of the square, and for most of the last century, the Allen Motor Inn stood across from the planned Bandar development.
In the 1950s, Peabody Square reached its economic peak: Woolworth’s, Kresge’s, First National Grocery Store, and the Strand Theatre all helped draw people downtown. By 1958, when the Northshore Shopping Center (now the Northshore Mall) opened, businesses began to leave the square. These days, the storefronts along Main Street are mostly populated by nail and hair salons, barbershops, and sub shops, with Walgreens serving as the street’s anchor.
Even without a major retailer, the square is choked with daily traffic. According to a city study, 27,000 cars drive through downtown Peabody each weekday.
Last spring, the city completed a major rehab of Main Street that included paving, lane reconfiguration, improved crosswalks, synchronized traffic signals, upgraded sidewalks, landscaping, and the addition of traffic medians.
Along the ground floor of the site of the planned hotel in the O’Shea Building, a furniture shop, a Chinese restaurant, and a barber shop do business. Bandar said he would work with the city to relocate the tenants.
David Serpa, who owns the Barber Shoppe, has mixed feelings about finding a new location.
For the last 20 years, he’s cut hair in his modest shop. But he understands that the times have changed in the square.
“It should revitalize downtown Peabody,” Serpa said, when asked about the hotel.
Across the street, Alan Forbes also had mixed feelings. He’d welcome a $10 million investment in the square, but he said the city or developer would need to add more parking spaces. These days, the city has about 250 metered spaces along its downtown streets and in its municipal lots. According to the current hotel plan, guests would either park in the city’s metered lots or have their cars parked by valet attendants.
“Without more parking it’s not a good idea, in my mind. But with additional parking it’s a tremendous idea for Peabody Square,” said Forbes, who has owned Sports Collectibles for 30 years.
Even with the parking issue, others are bullish on the square’s future. “I think this is going to be the catalyst. Once we have one investor making a significant investment in this property I think you’ll start to see many others do the same,” said Deanne Healey, president of the Peabody Area Chamber of Commerce.
Norman Lee thinks more people want to live in downtown Peabody. Currently, he’s renovating 10 apartments next to the proposed hotel site, and last month he bought the Rosenfelt Building, where another 12 apartments already exist. He’s also leased out the first floor to a “family-style” restaurant that plans to open soon.
“I think the potential is huge,” said Lee. “If you bring in a few key anchor locations to the downtown it will create the buzz necessary to bring in those quality secondary retail locations.”Steven A. Rosenberg can be reached at email@example.com. Follow him on Twitter @WriteRosenberg.