Old jail ready to be reborn as hotel

Developer Richard L. Friedman has both the financing and an operator for a $100 million hotel in the old Charles Street Jail at the foot of Beacon Hill, and he plans to begin construction next month.

The project, Friedman said yesterday, was delayed while he dealt with financing and historic-preservation issues. And the cost has risen, from an estimated $80 million since he won city permits in September 2002.

''This has had the gestation period of an elephant," said Friedman, who developed the Logan Airport Hilton and owns the Charles Hotel in Cambridge. ''The historic aspects have been a vast challenge to us. But like the Patriots, we're on the two-yard line now."

Friedman said he is close to completing terms on a $65 million construction loan with Deutsche Bank, and a deal with MTM Management LLC of Seattle to operate the 308-room hotel.

That clears the way for two years of construction to begin, Friedman said.

In addition to the money Friedman and Deutsche Bank are putting in, Multi-Employer Hotel Partners LP, a Seattle consortium of union trust funds, is investing.

The hotel, expected to open early in 2007, will occupy the hulking 150-year-old granite structure that served as Suffolk County's jail until about 15 years ago. Most of the guest rooms will be in a modern, 16-story adjoining structure yet to be built. The hotel will connect to and share underground parking with the new Yawkey Center for Outpatient Care, a recently opened addition to Massachusetts General Hospital.

Friedman said his architects, Cambridge Seven Associates Inc. and historic preservation specialist Ann Beha Architects Inc. of Boston, have completed construction drawings. He will choose a contractor within two weeks.

Suffolk Construction Co., which recently completed the Marriott Courtyard Brookline for Friedman, and Walsh Brothers Inc., which built the Yawkey center, are in the running.

The developer will benefit from federal and state historic-preservation tax credits on work associated with the old building, about half the project's total cost. The federal program offers 20 cents of tax credit for each dollar spent, Friedman said.

He estimated his savings under the state program, which doesn't work on a specific formula, at several million dollars and said the final amount is being negotiated.

But Friedman, who was awarded a loan by the Boston Redevelopment Authority for hard-to-finance projects, said he will not be using that money.

''It's a brilliant program. It did stimulate the private sector to step up," Friedman said. The private loans Friedman secured are at ''a slightly better rate" than the city's loan would have been, he said. Friedman didn't say what he is paying, but the BRA loan had an interest rate of about 12 percent.

MTM Management runs about 10 other hotels, including the Madison in Washington, D.C., and Doral in New York City. Its founder and chief executive, Jim Treadway, worked for Westin Hotels and Resorts for 23 years and is among the third generation of a New England family of hoteliers.

The hotel will occupy not only the jail site but also a small plot that formerly housed Buzzy's Fabulous Roast Beef. The hospital bought that land for $2.75 million and will lease it, along with the jail, to Friedman.

Friedman's luxury hotel at Charles Circle on Cambridge Street, across the street from the MBTA's Charles/MGH Station, doesn't have a name yet, but it won't contain the word Charles. ''I don't want it to be confused with the Charles" hotel in Harvard Square, Friedman said.

''I think the name 'jail' is fun," he said, ''and we've got to make the building fun." The former jail will also have a restaurant.

Historic preservation rules require that bars stay on some windows, and a cellblock -- perhaps an actual cell -- will still be identifiable.

''Old Jail Hotel, Suffolk Jail Hotel -- I've got 50 names floating around, and we're open to suggestions," Friedman said.

''I'm committed to using jail. It's honest. It's going to be known as that, anyway."

Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.