The Founder of 21c Museum Hotels Talks National—and International—Expansion
When Steve Wilson and his wife Laura Lee Brown opened Louisville’s 21c hotel in 2006, it was, by his own reckoning, a “seat of your pants” operation, one that the couple did out of passion for their hometown, but without much of a master plan. Flash forward a dozen years: 21c, which creates contemporary art museums within boutique hotels, now has eight properties in so-called “second-tier” American cities like Oklahoma City and Durham, N.C. Last year, multinational hotel firm Accor acquired an 85 percent stake in the company for $51 million, bringing 21c a significantly higher profile and creating plans for both international and domestic expansion, starting with Chicago at the end of 2019.
Wilson spoke with Worth about the appeal of smaller cities, the sweet satisfaction of disproving his father’s statement that art was useless and his newest venture, a restored farm showcasing the best of Kentucky’s bourbon and equine cultures.
Q: Since 2006, you’ve opened eight art-focused hotels, with Chicago scheduled to open next. What are the common denominators to the destinations you’ve picked?
A: Chicago’s a bigger city than the others. In the beginning, when we started Louisville, we never planned more than one hotel. It was love for our hometown and interest in contemporary art that inspired us to take a chance no one thought would work.
We also didn’t have the confidence to think we could handle a bigger city, but 21c Louisville was voted number one hotel in the U.S. and number six hotel in the world in Condé Nast Traveler’s 2009 Readers’ Choice Awards. After that, other towns asked us to come.
What was and is so appealing about second-tier cities?
The core of Louisville, like so many second-tier cities, had a lot of empty buildings. We wanted to help stimulate commerce, and we had a love of contemporary art, and there weren’t a lot of great facilities to showcase that. As we began to analyze our success, we thought that being in a smaller city was one of the reasons we were successful. But we later realized this was shortsighted because many of our guests were from bigger cities and asking us to come to them.
As far as growing in second-tier cities, we had people in Bentonville, Ark., and Cincinnati asking us to come to their hometowns. It was an opportunistic idea. It wasn’t that we analyzed the country. We had no hotel or restaurant experience. We wanted to go where we were wanted.
One of the similarities of the cities: We used tax and tourism credits and city grants. Financial success wasn’t assured in Louisville, and we looked for other cities that had funding opportunities.
What are the greatest challenges to working in second-tier cities and in major cities?
In the smaller cities, the challenges of historic buildings are a big mystery. All of our buildings are in renovated historic buildings except in Bentonville, which was an empty parking lot in the middle of town. You get into a project and find asbestos unexpectedly or a beam can be rotten. Historic buildings always have surprises, which usually mean delays and budget problems.
In the larger cities, there are more zoning regulations and more red tape. Government is bigger, and it’s not easy to walk into the courthouse and shake hands with the right person. It takes more time in a bigger city to figure out the lay of the land. One of the really critical things that we often have trouble with is finding enough public space for a true museum experience, at a ground floor level, in a larger city.
And the opportunities?
Generally, second-tier cities are really looking for investment, they really want new businesses in their city center, and they court you.
New York and Los Angeles have plenty of hotels, and it’s hard to convince government officials that we’re unique and offer something they don’t have. That said, the larger cities allow better room rates. Once you put the energy and effort that we do in terms of public spaces, infrastructure and art exhibitions, it’s the same effort for a 90-room as a 200-room hotel.
What makes Nashville particularly compelling as a destination?
Nashville seems to be on fire. From the 21c, you can see about 13 construction cranes. Music is at the core of Nashville’s interest to young people, and it’s not just country and western anymore. They say it’s the top—or second—destination for bachelorette parties in the country, and they’ve got a great food scene.
How have mid-size American cities changed since you started this work? What are your hopes and predictions for the next five years?
It’s hard to make a blanket statement. I think they need to embrace their unique qualities. There are opportunities to take advantage of new tax incentives and opportunity zones around the country. There are people in other cities like my wife and I who want to stay home, want their children to come home and will do what it takes to invigorate the community. I’m a big fan of the Walton family for what they’ve done in Bentonville, not only Alice [Walton] and the Crystal Bridges Museum, which I liken to the Guggenheim Bilbao in Spain. The next generation has done some great things for their community, like investing in restaurants and bike trails.
I’m a believer in what’s been called lately “the heartland.” There’s a lot of opportunity and ingenuity. Great things are happening in the middle of the country. You don’t have to be in Los Angeles or New York to be creative and to build a career.
Art is an essential part of your success. How large is your collection, and how do you integrate it into the hotels?
We have about 3,000 pieces, and the collection’s always growing. All of the works in our hotel museums are free and open to the public, 365 days a year, 24/7. The artists we feature include Derek Adams, Mickalene Thomas, Michele Pred, Hank Willis Thomas, Serkan Ozkaya and Ebony Patterson.
What do you wish people knew about Louisville? How has it changed since you opened 21c?
We have southern hospitality down pretty good (though people farther south don’t think of us as southern). We enjoy entertaining people at the Kentucky Derby. People are coming from all over the world to visit distilleries. We modeled the Kentucky Bourbon Trail after the wine trail in Sonoma and Napa, and new distilleries are popping up all over. We’re a river city, so people enjoy water sports and baseball is popular. We have a great museum row and the Actors Theater of Louisville is quite famous. Several Broadway plays have originated there. Of course, there are our horses. Our agrarian history provides for a beautiful visit, and it’s easy to get into the country quickly from Louisville. It’s a good place to raise a family.
What’s changed, or will change, with Accor’s acquisition of 21c? What opportunities and challenges does it pose?
Accor came at a great time, when we’d expanded as best we could on our own, but knew we had a product that could grow. Since Accor’s North American headquarters is in Toronto, Canada’s a likely next step for that expansion.
I’m also dreaming of opening 21c hotels in Europe. Lots of cities could use one. Our collection is international but has an American twist, and I think the way we look at and exhibit art would be interesting in other parts of the world. I’d love to be in Paris, Dublin, Amsterdam, Brussels and even, expanding beyond Europe, in Brisbane.
As far as challenges, we’re used to doing things by the seat of our pants. We weren’t rule followers, and we’re pretty successful at intuition and doing things our own way. Dealing with Accor is just different. They bring a lot of strength, wisdom, investment possibilities, but we obviously need to integrate into the holding company the same way other brands have. Integration is taking longer than we would have imagined. We didn’t have a grasp of the technology and of things like integrating the reservation systems.
What about your new venture, a Kentucky farm?
Hermitage Farm is a historic horse farm about 20 miles northeast of Louisville. In 1953, Hermitage Farm’s colt Dark Star won the Kentucky Derby. Queen Elizabeth, who owns horses and loves racing, visited Kentucky and Hermitage Farm in 1986.
It’s a special place and iconic as an 1830s plantation house with outbuildings and beautiful pasture lands all around. It’s on the drive between downtown Louisville and our home, Woodland Farm, in Goshen. The farm was going to be subdivided, and Laura and I couldn’t stand the idea of 500 houses sitting out there, so we went about trying to think of a way to keep it pristine and beautiful and still a working farm.
We’ll open in October, with a restaurant and a six-bedroom house guests can rent. The goal is to showcase Kentucky’s heritage and agriculture and to show the connection we have between bourbon and horses. Both came from our agrarian farm history.
We’re putting in a restaurant in an old horse barn. It will be quite rustic, and you can eat in horse stalls. The upstairs hay loft will have a touch of elegance with big Venetian chandeliers. It’s great for special events and for our unique bourbon tasting experience. If you visit distilleries, you taste their bourbon, one is older or younger, but we’ll have a sushi-style menu of more than 100 bourbons, including Old Forrester, Woodford Reserve, Maker’s Mark and Buffalo Trace. We’ll offer a true tasting.
Because of who we are, there will be art as well. It will be a unique way to experience Kentucky.
You’re active in land preservation. Why?
Several organizations are set up to hold easements, federal tax incentives to a land owner to keep the land green instead of developing it as housing or for commercial reasons.
Land may be appraised at $4,000 per acre as a farm, but at $25,000 or even more for its “highest and best use,” which could be a gas station or a housing development. If the owner will sign an easement that the land can never be developed, he or she can claim the difference in the values as a tax credit. Basically, the owner gives up value and can claim that on annual taxes.
Very often a farm may be sold for the benefit of the value of a subdivision, but there are organizations and trusts that can pay for, or at least give the tax credit, of that value. We’re active in supporting American Farmland Trust, Bluegrass Conservancy and River Fields.
Hopefully Hermitage will be an example of why the land is so important and I hope the tourists get something out of it beyond bourbon and pictures of horses.
What do you wish you’d known before you launched 21c?
I would like to have been less naïve. It’s pretty easy to break a rule when you never knew what they were. We did it out of passion, dedication and determination, and we may have thought we didn’t know enough, so we hired management companies. We had to let go of two different ones, and we decided no one else understood what we were doing. The traditional hotel school wasn’t able to embrace our idea that a museum could be in the heart of a hotel.
What are you proudest of in your work with 21c?
I was raised on a farm in west Kentucky, and my dad was a really hardworking farmer. I was the oldest son, and the tradition in my family was I supposed to be a farmer. My dad didn’t appreciate my creative nature. I can remember him saying, more than once, that art is worthless. I love the fact that 21c has shown the creative process is valued and that we’ve not only done a good job with our own business, but we’re a cornerstone of things happening around our hotels. It’s not only worthy, but stimulating and essential.
We’re looking in Fort Worth, Texas, Philadelphia and Los Angeles. New York is probably the hardest place to find affordable property. A good place for us would be Harlem or one of the boroughs, probably Brooklyn. They would be an edgier location for us, which we like. We like to think of ourselves as cutting edge.