Move the building and approval tests ahead of detailed concept spending. Use a staged commitment process rather than relying on a national conversion-cost-per-key figure.
Conversion Gate A: Can the building support the intended hotel?
Commission an initial test-fit and specialist review of room layouts, circulation, stairs, elevators, structure, plumbing, electrical capacity, ventilation, fire/life safety, accessibility, servicing and back-of-house space.
Ask the planning authority and land-use team to identify the approval path. Do not treat a broker’s statement that hotel use is possible as permission to operate.
Conversion Gate B: Can the project be permitted and priced?
Develop enough scope for a hotel-experienced contractor or cost consultant to assess the work. Obtain the authority’s likely review sequence, survey/test requirements, utility dependencies and relevant procurement lead times.
A proposed 3–6-week initial fatal-flaw study can be a useful procurement target if access and specialists are available. It is not a permitting timetable; require a separate project-specific development schedule.
Conversion Gate C: Is the complete capital structure viable?
Model acquisition, hard and soft costs, furnishings, operating supplies, pre-opening payroll, financing carry, reserves, contingencies and stabilization losses. Recheck the room count and revenue case after the technical design—not just before it.
If historic incentives are part of the plan, involve the State Historic Preservation Office and tax advisers early. NPS identifies eligibility, rehabilitation and certification requirements; the IRS states that the federal rehabilitation credit is 20% of qualifying expenditures and is generally claimed ratably over five years. It is not automatically a 20% reduction in total project cost or cash available at closing. (nps.gov)
Stop condition: if viability depends on an unverified approval, incentive, room count or building-system assumption, preserve that dependency explicitly rather than presenting a fully financed project.