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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Beth Ewen
October 2003

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Jim Graves, Graves Hospitality, on going for luxury in a bare-bones economy

What to do when the travel business falls flat after 9/11? Switch your plans to build the most high-end hotel in the Twin Cities, of course. That’s what Jim Graves of Graves Hospitality did with Le Meridien, the new hotel adjacent to the Block E development in downtown Minneapolis. A St. Cloud entrepreneur whose first business was a chain of modest AmericInns, Graves thinks that a hotel should be a grand public space and the centerpiece of a community.

“We wanted a hip hotel but a corporate hotel with all the services. What you’ll find with the hip hotels, like the early W’s, they’re very hip and cool but not very gracious or hospitable.

In the design, we wanted good quality furnishings that would not become passé. You see a lot of natural woods, natural stones. We’re not cutting corners, like some, you know — there will be this hip hotel with concrete floors.

We were talking to Juergen Bartels, who used to be involved with the Curt Carlson empire. He was now at W, the luxury hotel group. We had talked to them starting in 1999. They were opposed to us designing and operating it. We weren’t so much offended, but we wanted to do it differently. Then we said, who else? We didn’t want to be a Ritz Carlton, too stodgy, and not a Four Seasons. That’s a great hotel but they wouldn’t allow it to be locally owned.

So we talked to Marriott. They had a new brand called Renaissance, in which individual hotels could be designed. I can’t go into it, because we’re in a lawsuit now, but we agreed to get out of that arrangement.

It was a whirlwind. By now Bartels has put together a group and bought Le Meridien. They’ve having trouble with it, it’s a leveraged buyout. Who would have known about 9/11 and the economy?

We met with him, and brought our drawings and our concept. He loved it. He said, ‘Let’s do it.’ We’ll run it and just tap into their systems.

Our company is the majority owner and we have limited owners. We got financing through a syndicate of banks. We manage it. This is our biggest project. We’ve done five different Radissons and Marriotts. Our first semi-luxury hotel was the Radisson Suites in St. Cloud.

Changing hotel brands, that was difficult to go through. It’s hard to put together a luxury hotel in the first place, or any hotel, to get the equity together. Then we kind of came in at the end of Block E. We’re actually separate from Block E. Then you try to get a brand that the debt folks are comfortable with. They don’t get excited that midstream you’re changing brands.

Somebody said it took more guts than brains, and maybe that’s true.

We felt it was imperative to differentiate ourselves in this market. If we didn’t have a better mousetrap, so to speak, we’d be dead in the water. We had to be outside the box, even though it was expensive to do it. It’s hard to calculate all the costs, because we have opening costs and so on, but we use the figure of low to mid-60s, mid-$60 million.

It was January 2002 when we switched to Le Meridien, right after September 11. We felt that having an affiliation with Le Meridien would be more in keeping with a high-end hotel. They have 10 or 15 of them that are ranked the top in the world. The down side is they don’t have a lot of distribution.

We felt all the more reason to differentiate ourselves, and go with the high-octane product. Accordingly we increased our investment by some $10- to $15 million. So it was a decision made with a clear vision of what was going to take place in the lodging industry.

In doing so we have something unique. If we had built a nice hotel, it would just be another nice hotel. It was a tough market, and we felt we needed to come out of the gate with a lot of pizzazz.

People didn’t necessarily say we were crazy. They questioned it, whether it was the right move. We feel it was the right move. It’s kind of counter to what most companies have done. Time will be the test.

We’re at or above projections for every month. The reception for the hotel itself, I don’t want to exaggerate, but the response has been phenomenal. There’s a hunger for high-fashion, high-quality design that’s unique.

The traveling public has been exposed to so many different new designs. There’s been a renaissance. Hotels used to be the great buildings in every town. They were the social and entertainment hubs, a lot of the personality of the community would be expressed through this grand hotel.

Our goal is to make you feel that you’re a very well-to-do individual when you stay here, that you have all the comforts you’d have if you had an unlimited budget.

We started off 25 years ago, this chain called AmericInns. I grew up in St. Cloud, small town, started my business in my basement. We had a vision of ‘Let’s build the best little hotel possible, whether we go to Brainerd or West Bend.’

We sold that company 10 years ago. I always traveled nationally and internationally. I have always had an interest in design, and an interest in the lodging business, probably the oldest business in the world. You can bring the bacon home about 10 different ways; you might as well do it the way you like.

We’re not doing the run-of-the-mill thing, and it’s a little — it’s not the safest thing to do. But Will Rogers said you have to go out on a limb to get the fruit.

— As told to Beth Ewen