Construction to Begin Next Week, though some question timing of project

The New Mexican

 
Despite an economic downtown that has slowed the travel industry, an Arizona builder soon will begin construction of a $14 million, 92-room hotel on Santa Fe’s south side.

The three-story Hyatt Place will rise at 4350 Cerrillos Road, in the Zarape retail development near the new Discount Tire store, on the east side of Cerrillos Road and south of Wagon Road.

Work is scheduled to begin next week, with the hotel expected to open in the spring of 2010.

The general contractor, Tucson-based American Construction Corp., is a partner in the project with landowners Carlos and Sylvia Garcia-Salgado, who own Don Juan Paint and Body shop in Santa Fe.

Rim Hospitality, a Modesto, Calif., firm with 25 years in the hotel industry and operations in the U.S. and Canada, will manage the property.

Carlos Garcia-Salgado said financing for the new hotel was provided by Charter Bank through a Small Business Administration loan.

“We’ve been working in the community for 25 years,” Garcia-Salgado said. “To have a local owner makes a lot of sense.”

Hyatt Place, a brand owned by Global Hyatt, is a mid-scale hotel chain aimed at business travelers. The hotels feature high-tech self-service facilities, including self-service kiosks, an “e-room” providing access to computers and printers and, in each guest room, a media and work center complete with a 42-inch, flat-panel HDTV.

There are about 115 Hyatt Place hotels around the country, including properties in such cities as Atlanta, Chicago, Cincinnati, Dallas and Washington, D.C.

“We’ve been looking all over the country for a site,” said Mark LeBlanc, senior vice president of development for Rim. “We love the Hyatt Place concept because it’s so new and fresh.”

American Construction has other New Mexico properties, in Deming and Roswell, and feels comfortable doing business in the state, LeBlanc said, despite the fact that Santa Fe’s regulations can deter some developers.

“They also felt coming into Santa Fe with the newest and freshest concept would give them a competitive edge,” LeBlanc said.

LeBlanc admitted that building a new hotel at a low point in the economic cycle is difficult, but he said there are several advantages in doing so.

“Construction costs are down to a five to 10-year low,” he said. “Their cost basis for a new hotel will be significantly less than stated. What was going to cost $14 million to $15 million will be closer to $13 million or $14 million. It might even be under that.”

Another advantage in going ahead with the development now is that it keeps American Construction employees working, LeBlanc said.

Keith Toler, executive director of the Santa Fe Convention and Visitors Bureau, said he hadn’t heard about the planned Hyatt Place and couldn’t comment on it.

“Hyatt does come with a good name,” he said.

Art Bouffard, director of the New Mexico Lodging Association, said it is a “very difficult economy” in which to be building a hotel. “I don’t quite get it.”

“New Mexico overall is overbuilt in terms of new properties going up,” he said. “And we’re in a real predicament right now. We thought we had recovered from 2001 a little bit, but we’re way behind now” in terms of room-occupancy rates.

Several local hotels have cut employee hours or laid off workers recently. January is typically the slowest month of the year for Santa Fe hoteliers.

The most recent lodging to open in the Cerrillos Road corridor was the Sleep Inn in 1999. It’s now called The Inn at Santa Fe.

The last two hotels to open in the Santa Fe area were Encantado Resort in Tesuque and Buffalo Thunder Hotel and Casino in Pojoaque. Both opened last year.