Rhaglan Hospitality, LLC is preparing to purchase and renovate the St. James Hotel. Letters exchanged between Jim Lewis, the Chief Executive Officer for Rhaglan and American South Real Estate Fund, LP (ASREF) showed that ASREF is prepared to loan up to $2,533,200 for the purchase of the St. James Hotel located at 1200 Water Ave. and the Dallas Seed Building Property, located at 1224 Water Ave.

The original planned closing on the sale of the hotel and the attached Dallas Seed Building property is Oct. 1. However, Rhaglan received an extension to let the city know that they have secured full funding to purchase and redevelop the hotel until Dec. 17. This extension was approved at this week’s Selma City Council meeting.

City development officials said that this part of the process has been in the work for months, and that the overall project has not made it to the construction project phase yet.

Rhaglan Hospitality LLC is based in Birmingham, and was founded by James W. Lewis, Jr. and Joe White. Rhaglan, a name that originated in Wales, connects to the historic nature and enduring strength of the Rhaglan Castle, a landmark in the United Kingdom located just south of Birmingham, England — the sister city to Birmingham, Alabama.

Lewis and White’s experience in development and hotel management totals over $150 million of completed commercial buildings, including numerous core branded hotels totaling over 700 rooms, with direct operations management at the executive level for hotels totaling over $120 million in annual revenue.

The business has been designated as an Approved Full Service Operator by Hilton Hotels Worldwide (Hilton Franchise, LLC).

Current developments include The Redmont Hotel in Birmingham, which reopened in March 2016.

This hotel was the extent that allowed Rhaglan to enter into a 20-year franchise agreement with Hilton as a Curio Collection Hotel to be managed by the company.

Along with the St. James Hotel, the group is involved with the Commerce Hotel in Birmingham.

The budget presented by Rhaglan during the loan application also broke down their budget for plans on the hotel.

The breakdown includes a purchase price for the land ($400,000), $1642,000 for a GC contract, $30,000 for laundry equipment, $25,000 for exercise equipment, $20,000 for lobby, bar and restaurant equipment, $30,000 for kitchen utilities, $315,000 for guestroom equipment, $25,000 for property management systems and $25,000 for communication systems.

Soft costs include $82,000 for architectural, electrical, mechanical and interior work, $3,000 for a survey, $42,000 for legal work, $20,000 for appraisal and title, $10,000 for environmental work, $35,000 for franchise fees, $63,000 for initial supplies, $17,000 for pre-construction costs, $50,000 for HREC consulting fees and $10,000 for operational carry costs.

Financing costs include $35,000 for legal, $10,000 for asset management and inspection costs, $5,000 for third party due diligence and marketing costs and $15,000 for disbursement agent and construction monitoring fees.

The projected investment will be around $74,000 per room, and there are 42 rooms in the hotel.

The scope of work to renovating the hotel includes branding for the Hilton Worldwide portfolio, fixing room hardware including doors and exposed conduits, fixing malfunctioned HVAC systems, installing technology locks and operating systems, fixing the surrounding landscape including overgrown foliage, replacing all rotten exterior, restructuring the balconies and replacing windows.

The St. James Hotel was built in 1837 with the last renovations completed in 1997.