Armenia Marriott Hotel
Purchase and transition to Marriott
Heritage has a place in locals' Armenian hotel efforts Naomi R. Kooker Journal Staff March 18, 2005
In Yerevan, the capital of the Republic of Armenia, a handful of Boston businesspeople are hoping guests will check in for the night.
Check into Armenia Marriott Hotel, Yerevan, that is, a luxury hotel in the heart of Republic Square.
There's electricity, hot water and the phones have voice mail -- significant improvements from when the country was under Communist rule, when the hotel was simply the Armenia Hotel, flashlights were needed for guests to get up and down the stairs and showers were a rare occurrence.
Last June, the 235-room hotel opened with fanfare. Now there is hope not only of a return on investment but also of a return of tourists with Armenian ancestry to get reacquainted with their heritage.
Charles Talanian, owner/operator of C. Talanian Realty Co. and a second-generation Armenian-American, along with his sister, Gail, and other investors, sunk millions into the project. It was the real estate developer's first hotel investment. And it was the first for Paul Korian, president of PK Development LLC, a business consulting company in Cambridge.
Together with Gravestar Inc. -- a Cambridge asset management and real estate development firm that operates the Burlington Marriott -- and other investors, they formed AK Development LLC, which contracted with Marriott International to renovate and operate the hotel. In 1998, AK Development paid $10 million cash for the 485,000-square-foot complex made up of three buildings, one with an office tower, as well as a vacant lot that the team is deciding what to do with. (A spa is on the list.)
The cost for renovations has reached $42 million, produced with help of the World Bank and the U.S government.
"Typically, if one were to invest in an emerging market ... you get the benefit of taking a risk at a higher rate than if you were to just invest in downtown Boston," says Korian.
And dealing with a former Soviet Bloc country? No set laws, no formal business know-how. Cash deals only. Everything took "10 times" longer than normal. The artwork being delivered to the Marriott was delayed three weeks because border officials thought they were originals.
The hotel boasts four restaurants and a ballroom that holds 500 people. Rooms that go for $135 a night would go for $400 to $800 a night in the states, says Talanian.
Instead of the two-day trek Talanian made in 1995 to reach Yerevan, it now takes a four-hour flight from London and a 20-minute car ride from the airport. Talanian recalls the "broken" appearance of the city from his first trip, the fountains and gardens in disrepair.
"The place was a wreck," he said.
This is one way to give back to the land where his family began, he says.
"You've got history, you've got people who are stuck in time," Talanian says of the region.
© 2005 American City Business Journals Inc.
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