Jun. 9--A luxury hotel-condo project is being planned for downtown Seattle by The Vance Corp. and City Investors, the real-estate arm of Paul Allen's Vulcan Northwest. 

The $250 million project -- still in the planning stages -- was announced yesterday at a time the local hotel industry is showing no signs of softening. By contrast, national hotel revenues dropped about 4 percent in May. 

Occupancy and room rates in downtown Seattle are up significantly from a year ago, according to figures released yesterday by Wolfgang Rood Hospitality Consulting in Bellevue. 

"That was very unusual. I was surprised," Rood said, attributing it to the relative strength of the local economy and increased tourism and convention business. 

The downtown hotel occupancy rate for the first four months of this year was 68.9 percent, up from 63.1 percent for the same period a year ago, while average room rates increased 7 percent to $128.29 from $119.46, according to Rood. 

The Vance-City Investors project is going for the high-end market and will feature about 300 rooms and an undetermined number of condominium units, retail space and parking, said Jim Falconer, Vance chairman. 

The complex will be across from the Pacific Place shopping center. The Vance Corp. and City Investors have bought all the parcels of land on the block, except for the Tower Building. Falconer did not disclose land costs. The site includes parking lots and old office buildings. 

The partnership also bought the small block across Sixth Avenue, which has a Bank of America branch and parking lot, for $11.5 million. No plans were announced for that block. 

A hotel-condo project is unique to Seattle, but not New York, Washington, D.C., and San Francisco, Falconer said. 

The downtown Seattle area has about 8,500 hotel rooms, with more on the way. 

-- The 450-room Grand Hyatt Elliott, near the Washington State Convention and Trade Center, is to open this month. 

-- A 234-unit Marriott Hotel at Yale Avenue and Howell Street is to open this fall. 

-- A 400-room Marriott on the waterfront near Pike Place Market received city approval in April. 

Information from Reuters was included in this report. 

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