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Rooms at the Top

A recession. Credit markets closed tight. A city already packed with hotels. Graves Hospitality Corporatio is developing luxury hotels in New York anyway.

Rooms at the Top

Lunchtime at Cosmos, the four-diamond restaurant in downtown Minneapolis, and Jim Graves is indistinguishable among the suited twosomes and threesomes scattered around the glossy dining room. At 55, he bears a small resemblance to the actor Peter Gallagher. He quietly orders, then turns to earnest conversation. If you didn’t know that he is Mister Graves, whose name is on the 21-story Graves 601 hotel where Cosmos is the prime dining venue, he wouldn’t be the one to tell you.

Graves and his son and business partner, Ben Graves, opened the hotel nearly six years ago with room rates that shocked the local hospitality industry: around $210 per night, and about $80 to $100 higher than the going rate at any other downtown hotel. But they backed that up with sleek, chic surroundings and service that made guests feel that they’d entered an exclusive and luxurious retreat. The Graves 601 (which opened under the Le Méridien name of its reservations and marketing partner at the time) created a new luxury hotel category in Minneapolis that has since been populated by the Chambers, the W, the Ivy, and other boutique properties.

Few who know Jim Graves as the innovator behind the high-end hotel scene in Minneapolis associate him with another business that he launched much earlier in his career: the budget-hotel chain AmericInn. He no longer owns the brand or the hotels he began developing in the 1970s, but in outstate markets where stripped-down economy motels were the rule, Graves made AmericInn the exception, something closer to a full-service hotel, but still at moderate rates. It was as much an innovation in its class as the Graves 601 was.

Even fewer people know about what Jim and Ben Graves plan to do next. Having led the luxury hotel trend in Minneapolis, they’re taking their high-style concepts to New York. Graves Hospitality Corporation plans to open a total of three new properties in Manhattan and Brooklyn in the next three years.

Business and leisure travelers are scaling back. But right now, Jim Graves sees construction costs down 25 percent. Soon, he sees economic cycles working themselves out and better times returning. And whenever he looks at the hotel scene, he has a knack for seeing what’s missing, and what guests will be willing to pay for.

 

A Big Idea for Small Cities

 

Jim Graves spent just a year and a half teaching sixth grade in his native St. Cloud after college, then went to work in 1977 for the St. Cloud–based Brutger Company. Dan Brutger owned the Thrifty Scot hotel chain. Graves helped Brutger develop a new brand of hotel, ScotWood. (A few of these still operate in Minnesota and North Dakota.)

Two years later, Graves went out on his own. In 1979, he founded Intra Financial Corporation (which evolved into Graves Hospitality Corporation) and launched his Americ- Inn chain, finding his first financial partner in Rogers and building his first property there.

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