Hotel project at Burlington airport falls apart, 7 years after efforts began

On the lot just north of the parking garage at Patrick Leahy Burlington International Airport, developers have imagined a hotel for years.

The latest plan, a five-story building with approximately 117 rooms, fell apart this past June, according to airport director Nic Longo. Early next year, Longo said the airport hopes to field bids from new developers interested in leasing the land to build and manage a hotel.

This latest contract between the airport and two developers — known jointly as BTV Hotel LLC — stipulated certain financing requirements for the project to move forward. That contract expired in early June with the requirements still unmet, according to Longo, who said the developers decided not to renew it.

“The economics of the project did not make sense at this particular time,” said Longo.

BTV Hotel LLC was composed of Colwen Hotels , which manages hotels across New England, and DEW Construction , a Williston-based company. The 62,000 square foot hotel would have cost the group between $28 million and $29 million, according to Don Wells, DEW Construction’s chief executive officer, “including permits, furnishings, and interest carried over” during construction.

Wells cited interest rates — which are at a two-decade high — as the main reason why building a hotel “just doesn’t work” at the moment.

“We don’t have a bank right now that says that it would loan us the money,” said Wells.

The deal’s collapse is just the latest in a series of attempts that have never broken ground. Officials have long recognized that Vermont’s biggest airport needs a hotel for travelers to stay overnight — especially since many flights leave early in the morning, or arrive late at night. But the history of the project has been marred by bad luck.

Efforts began in earnest in 2017 , when DEW Construction first signed on to the project. Back then, plans called for a 104-bedroom hotel to the south of the parking garage. There was talk of construction starting as soon as early 2018.

The moment of optimism was brief. Objections to the proposed site from the Federal Aviation Authority shut the project down in February 2020. Developers soon set their sights on the lot north of the parking garage, began re-submitting permit applications, and set a groundbreaking date for the summer of 2020. A month later, the Covid-19 pandemic slowed flights to a trickle and tabled any thought of building a hotel.

In the seven years of failed efforts to build an airport hotel, DEW Construction had remained a constant, though two hotel management companies dropped out before Colwen Hotels joined in 2023 .

Together as BTV Hotel, the two companies signed a contract with the airport that set permitting, branding, and financial contingencies that, if reached, would trigger a ground lease. This contract — called an option agreement — expired on June 6, according to Longo, and shortly after that, he said, the airport received a letter from BTV Hotel indicating that they were “not seeking an extension.”

“All the way to the end it was a really great relationship, a great partnership,” said Longo. “It came down to the nuts and bolts and ones and zeroes.”

He continued: “The economics of building a massive capital project like that didn’t work out for us this year.”

Nevertheless, Longo was adamant that the dream of an airport hotel is “not done yet.”

“There is a huge demand for a hotel at this airport. And a niche in the market for folks from further away to spend a night at least,” he said.

Longo said the airport would be “reevaluating through the end of the year” and “hopefully” launching a public bidding process early next year, inviting new developers to “show their interest and showcase their companies.”

He indicated that the airport’s role will remain the same — not putting any funding into the project, but merely offering “contractual lease terms” for “a developer and management company to host a hotel” on the north parking lot.

Longo acknowledged that other development companies might face the same financing difficulties, but said that the airport had “already received queries from other developers, asking us what the status is and the potential to partner with us.”

And, Longo added, past partners are always welcome to bid again. Wells confirmed that DEW Construction had held talks with the airport about a new bid, but that it all depends on whether the economic landscape improves.

“I don’t know what the timing is for interest rates to get to a point where it would work,” Wells said.

That the north parking lot remains just that — after seven years — is “very disappointing,” said Wells, adding that there was nothing to do but “wait patiently” for the Federal Reserve to cut interest rates.

Longo was a little more glass-half-full: “Disappointment? No, I wouldn’t say disappointment. That excitement, that opportunity is what I hold onto the most.”

Read the story on VTDigger here: Hotel project at Burlington airport falls apart, 7 years after efforts began .