Once considered one of the most elegant hotels in Raleigh, the Velvet Cloak Inn has been sold to a developer who plans to tear it down and put up student housing in its place.
Tax records from the Wake County Revenue Office show that the property was sold earlier this month for more than $5.5 million. The Velvet Cloak Inn was purchased by Peak Campus, an Atlanta-based company that specializes in building apartments for students. An attempt was made to reach Peak Campus for comment, but it did not respond by print time.
Built in 1962 by York Properties, the Velvet Cloak Inn was once the premier destination for Raleigh visitors. Politicians, artists and businessmen all called the Velvet Cloak Inn home at different points in its history. There was a heated pool, an elegant ballroom and even a suave underground nightclub. The Velvet Cloak Inn also acted as the campaign headquarters for Gov. Pat McCrory. Though the inn has not rented out rooms for several years, there were still residents who owned condominiums at the Cloak as late as 2014.
The new complex will be just one in a recent trend of student apartments coming to the Hillsborough Street area.
The Smoot family, the previous owners of the Velvet Cloak, originally purchased the Velvet Cloak Inn with the intention of someday restoring it to its former glory. However, the years rolled by, and the most that had come of it was a few sales of rooms in the hotel as condominiums. The Smoots decided to abandon efforts to renovate and sell the hotel in 2012 but faced legal disputes with the owners of the condos.
With the sale finalized, the future of the Velvet Cloak is uncertain, and the new owner has not stated its full plans for the site. Currently, the building is not up to development codes that Raleigh has in place for residences.
The Velvet Cloak Inn, located next to the YMCA on Hillsborough Street, is an old closed-down hotel that is now in plans to be converted into student housing. Built in 1962, it was the first hotel built outside the main downtown areas and hosted many celebrities and state legislators over the years.
