Key to the Baker project is the acquisition of federal and state historic tax credits – the latter of which were just passed in the Texas Legislature. Fairchild explained that both types of tax credits will give back a combined 45 cents for every dollar invested in the project.
These credits can then go out into the market and be sold, to ensure cash flow.
In order to qualify for these credits, the project has to adhere to strict guidelines and must restore the Baker – a nationally registered historic building – as closely as possible to its original state when it first opened in 1929. For this reason, the new Baker will appear like a time capsule, harkening back to its full, original glory, with the exception of a few modern amenities.
Fairchild explained the hotel lobby will look exactly as it did in the hotel’s heyday. To make the hotel more attractive for potential visitors, every two to three rooms will be combined to give the hotel about 155 larger rooms, instead of 450 small rooms. However, because of the tax credit requirements, all of the original room doors will have to be refurbished and kept in the building. So, Fairchild said, the hotel’s corridors will look exactly as they did years ago, but only about one third of the doors will actually be numbered and access guest suites.
Those involved in the project are confident that the restored Baker Hotel will have no difficulty attracting guests and making money, according to Fairchild. The tax credits are a big part of that equation. Howerton, too, believes in the project’s viability.
“The bottom line is that the project has to make money,” he said. “The project has been structured with the idea that if they bring enough incentives to the project, it can make money. It’s a property that has a lot of name recognition throughout the State of Texas. Historic restoration is a hot-button issue among developers these days and developers like to do projects that have some caché to them. If a project can be made successful at the Baker Hotel, then that has a certain amount of attraction to it in and of itself. It’s a much easier product to sell as opposed to a product that no one’s ever heard of.”