Denver-based private capital firm KSL Partners buys Davenport Hotels
Dec. 7, 2021 Updated Tue., Dec. 7, 2021 at 10 p.m.
After restoring The Historic Davenport Hotel in Spokane’s downtown and building a brand of luxury hotels in its wake, developers and hoteliers Walt and Karen Worthy announced Tuesday the sale of their five properties.
Colorado-based KSL Capital Partners bought the 1914 landmark and the Worthys’ other four properties, comprising more than 1,700 guest rooms in the downtown core. The parties did not disclose the amount of the sale, which is expected to close in the next 30 days.
A representative of the new operating group and the hotel brand’s managing director both said Tuesday the sale would not affect the service experience at the five properties, which in addition to the historic hotel includes the Davenport Tower, the Davenport Lusso, the Davenport Grand and the Centennial.
“You won’t see any change in the name of the hotel,” said Pete Sams, chief operations officer for Davidson Hospitality Group, which will operate the hotels on behalf of KSL Capital. “We have a great reverence for the service and experience these hotels provide.”
Davidson is retaining all staff and the leadership team in place at the Davenport hotels, including Lynnelle Caudill, who has been as managing director of the brand since 2002, when the Worthys reopened the Historic Davenport.
“Louis Davenport started this whole thing,” Caudill said. “Then we had Walt and Karen’s chapter. And now, it’s time for a new chapter.”
Walt Worthy, who did not respond to a request for comment on Tuesday, bought the historic hotel at 10 S. Post St. in 2000 for $6.5 million, kicking off an expansion to four more properties.
“The time has come to transfer ownership to new hands,” Worthy said in a statement provided Tuesday. “KSL has the depth of expertise and capabilities to provide exceptional service as they have owned and operated some of the most prestigious hotels in the world, and we couldn’t be happier that they will continue to preserve the history and heritage of Davenport Hotels here in Spokane.”
For years it had been feared the Historic Davenport, a Kirtland Cutter-designed landmark, would be demolished because of the asbestos contained within the hotel.
The Davenport Hotel photographed on Friday, April 21, 2017. (Colin Mulvany/THE SPOKESMAN-REVI)
“It’s just a masterpiece sittin’ there waitin’ to get framed,” Worthy told The Spokesman-Review after buying the block. “It’s overwhelming – it’s so damn big. But, once we get started, I think all the pieces will fall into place.’’
The Worthys reopened the Davenport two years later, after spending a reported $35 million to renovate it. They next turned their attention to the Davenport Tower, a 21-story hotel opened in 2007. The purchase of the Lusso, a boutique hotel at 808 W. Sprague Ave., followed in 2009, and the Davenport Grand Hotel opened its doors in 2015, though not without some controversy about how much the city of Spokane owed for soil cleanup on the site.
The Davenport portfolio was rounded out by purchase of the Red Lion Hotel at the Park in 2018 for $35 million, now branded as the Centennial.
Davidson and KSL were enticed by the promise of future growth in Spokane, Sams said. He cited the renovations of Riverfront Park and the construction of the nearby Podium sports facility as well as a new downtown multiuse stadium as evidence they were bullish on Spokane’s hospitality potential.
“We believe this is a market on a wave,” Sams said. “We’re catching it on the front end of a wave.”
The Davenport hotels will be the first to be operated by Davidson in Washington state, but KSL has regional holdings that include the Hayden Lake Marina, Crystal Mountain Resort, and the citizenM hotel in Seattle’s South Lake Union neighborhood, as well as international investments.
The firm, which specializes in travel and leisure investments, continued to raise and spend money during the COVID-19 pandemic, according to Bloomberg. In October, the trade publication reported KSL Capital had spent more than $3 billion between April 2020 and Sept. 30, and was actively seeking investors for additional ventures.
The Historic Davenport will not be the first historic hotel to join KSL’s portfolio. The firm also owned The Homestead in Hot Springs, Virginia, from 2006 through 2013, as well as the Grand Hotel on Mackinaw Island, Michigan. That hotel, built in 1887, was sold to KSL in 2019 and is currently operated by Davidson.
The hotel, known for its festively decorated lobby at Christmastime, is listed on the National Historic Register. Caudill said the change in ownership would not change that tradition.
“They used to call the Davenport lobby the living room for the Spokane community,” she said. “And I think that hasn’t changed.”
KSL’s purchase comes just as the Davenport brand, in recent weeks, has ramped up its hiring in anticipation of a return from the lean days of the COVID-19 pandemic. All properties but the Grand Hotel shut down for several months in early 2020, and the company downsized its staff from more than 1,200 to just a little more than 300 in early 2021.
“Not everyone came back, and we just had to start recruiting,” Caudill said, adding that the brand is back up to more than 700 employees. Working with Davidson and KSL will allow them to recruit workers from other parts of the country and incorporate some of the ideas at other properties into the Davenport brand.
Caudill said there’s potential for 2022 to be a better year than 2019, with several citywide events planned and the opening of new facilities. Sams said there are indications that business and convention travel are on their way back after a two-year lull due to the pandemic, all comforting signs for an industry that was hard-hit as people stayed home to stay safe.
“We could have a remarkable 2022,” Caudill said.
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