A year ago, the Massachusetts Port Authority pared back its ambitions for a huge hotel in South Boston after Governor Charlie Baker shelved plans to expand the convention center across Summer Street. But now Massport is poised to get a giant hotel after all, one with more than 1,000 rooms.
And, in an important change from 2015, no public subsidy will be needed to build or operate the hotel.
A team that includes hotelier Robin Brown, the Boston real estate developer Davis Cos., and Dallas-based Omni Hotels & Resorts has emerged as the top bidder for the project, according to people with knowledge of the bidding.
Massport is negotiating more precise details on the hotel project with the team, the people said, and is expected to formally award the project within three months.
Terms of the lease with Massport are not known. Nor was the exact number of hotel rooms disclosed, but it exceeds 1,000, which would make the hotel among the largest in the city, the people said. Some rooms would be micro-units — smaller, less-expensive rooms aimed at millennials.
Members of the development team declined to comment, as did Massport, saying the procurement process is still underway.
Although the Boston Convention & Exhibition Center is run by a separate agency, Massport is a key player in its business prospects because it holds extensive properties in the Seaport District, including the 2.1-acre hotel site, across Summer Street from the hall.
Massport had sought a hotel with as many as 1,200 rooms, in conjunction with a planned $1 billion expansion of the convention center. At the time, officials said a hotel of that size could be difficult to finance and might require government subsidies to get it through its early years.
Then, in April 2015, Baker put the brakes on the convention center’s expansion plan after raising concerns about the cost. That prompted the port authority to curb its hotel ambition; it later sought new proposals for a hotel with potentially as few as 250 rooms.
In the spring, six development teams submitted bids. The sizes of the other proposals have not been disclosed yet.
Real estate and travel industry specialists say demand for hotel rooms in Boston — and room rates — have been increasing sharply for the past several years, which may explain why the Brown-Davis-Omni team felt confident proposing such a large hotel.
“This is the time to build big, no question about it,” said David Begelfer, chief executive of the real estate trade group NAIOP Massachusetts. He was not surprised the development team is not asking for a public subsidy. “The bottom line here is that the hospitality market has never been stronger in Boston than it is right now.”
The Massachusetts Convention Center Authority has long complained about a shortage of hotel rooms within walking distance of its South Boston facility, saying it has lost big shows to other cities with more rooms. In a report in June, the authority also blamed Boston’s high rates for hotel rooms — an average of $270 a night in 2016.
Today, the South Boston Waterfront has about 2,500 rooms in seven hotels. The largest, a Westin next door to the convention center, has nearly 800 rooms.
Officials at the authority declined to comment.
Brown is one of Boston’s most successful hoteliers, having served as general manager of the Four Seasons and codeveloper of the Mandarin Oriental near the Prudential Center, two of the city’s most luxurious properties, He also codeveloped the hip Verb hotel near Fenway Park.
Davis Cos., led by Jonathan Davis, owns many commercial buildings and office parks in Massachusetts and other states in the Northeast.
Omni operates dozens of hotels in North America, including several near convention centers in cities such as Dallas and Nashville.
Its only hotel in Boston is the 551-room Omni Parker House. It also has hotels in Providence and New Haven and acquired the Mount Washington Resort in New Hampshire last year.
“Obviously, they’re seeing a good opportunity [in Boston],” Deanna Ting, an associate editor at Skift, a travel news site, said of Omni. “Any time there is a bid open for a hotel company to build a hotel next to a convention center, they’re going to jump on it, especially in a top-tier city . . . and a city like Boston is definitely top-tier.”
Omni did not return calls seeking comment.
Pat Moscaritolo, head of the Greater Boston Convention & Visitors Bureau, a trade group, said that Omni may be able to fill many rooms at the new Boston hotel even without conventiongoers.
“People could raise a doubt about whether a 1,100-room hotel would work with the [convention center] building not being expanded,” Moscaritolo said. “But Omni has a major sales and marketing team, and they will be out selling Boston around the globe.”
Begelfer said the size of the Omni project also partially reflects an increase in the number of major employers within walking distance of the convention center, including new offices opened within the past two years for PwC, Goodwin Procter, and General Electric. “You can see that the center of the city has shifted,” he said.