The Key Hotel is one of the most prominent buildings in Frederick's downtown historic district. Named after the composer of "The Star Spangled Banner," a former resident of the city, it occupies land that has been home to a tavern/inn for three centuries. The original building on the site went through several incarnations - Talbot's Tavern, the City Hotel, Dorsey's Hotel, and the Arlington Hotel - before being razed in 1920. During that period it hosted 19th-century figures such as the Mexican General Santa Ana, Senators John C. Calhoun and Henry Clay, and Aaron Burr; even earlier, in 1791, it was one of the places where George Washington did actually sleep.
Builder John S. Hersey and engineer W.S. Arnold created the Francis Scott Key Hotel in 1922. The red brick building at the corner of Court and West Patrick Streets immediately became a civic and social center, hosting meetings of groups such as the Rotary, Kiwanis and Lions clubs, women's organizations, and garden clubs; the Frederick County Chamber of Commerce also maintained its offices there for some time.
The Key Hotel was sold in the 70s and converted to a nursing home known as the Homewood Retirement Center. However, in 2000 the Homewood Center moved to a newly-built facility that was more amenable to its senior residents, leaving the Key Hotel empty.
Baltimore-based developers Struever Bros., Eccles & Rouse, Inc. bought the Francis Scott Key Hotel in 2000. The firm, which had wide experience with adaptive use of historic places, saw a clear opportunity to promote market- rate housing for urban professionals, but and had wide experience with adaptive use of historic places in downtown locations. However, their $10 million project faced several challenges. The most significant problem was the result of upper-floor renovations for the nursing home facilities, which damaged not only those floors but also the mezzanine and resulted in extensive damage to the main lobby's elaborate plaster ceiling.
Repairing that damage became part of the redesign that created 46 one-, two-, or three-bedroom apartments. These units also included modern amenities, such as dishwashers, microwaves, and high-speed telecommunications wiring. Renovation of the commercial space on the first floor recreated storefront designs that match the exterior architectural style of the building. The original dining room was converted to accommodate law offices but retained its character-defining features. Rehabilitation of the Key Hotel was financed through a combination loans and equity, including a primary mortgage of $4,587,600; a low-income housing tax credit totaling $1,036,796; historic rehab tax credits of $1,464,473; a HUD Office Conversion Loan totaling $1.1 million; and State Historic Credits worth $1,764,967.
The Francis Scott Key Hotel reopened and leased its first unit in October 2002. Thirty-six of its 46 apartments are already leased, as are four of the eight commercial spaces. The new residents are typically urban professionals who want to take advantage of downtown amenities and avoid long commutes from the suburbs, and they are expected to spend $250,000 annually for services and on retail in the area. According to the Greater Frederick Development Corporation, the apartments are expected to increase surrounding property values and generate $50,000 annually in sales taxes. The Francis Scott Key Hotel Apartments are another demonstration that preservation can provide profitable investments and be a valuable tool in urban revitalization.