Mar. 29, 2002 - La Mansion Hotels Ltd., developer of the Karotkin Building renovation, announced Wednesday that it had obtained financing and would begin construction immediately on the city's latest River Walk luxury hotel. 

Starting construction puts La Mansion Hotels ahead of other hoteliers, such as the developers of the proposed Sheraton Riverwalk, that have struggled to obtain financial backers. 

"The (Karotkin) project is an extremely good project," said La Mansion del Rio Inc. President Patrick Kennedy. 

"It made a lot of sense to us, and it made a lot of sense to the people that did the financing. It is remarkable, particularly since 9-11, that across the country the capital markets have really tightened up, and hotels are not in favor," he said. 

The Watermark, as the new hotel will be named, is to be a seven-story hotel and spa that will use the historic four-story Karotkin, built in 1900, as its façade. 

"The Karotkin Building's striking Renaissance Revival architecture complements the rich architectural diversity found along the River Walk," Kennedy said. "The completion of the façade and the construction of the hotel's new interiors and systems will restore the building to its rightful place as one of San Antonio's architectural treasures." 

The Karotkin underwent renovations in 1939 and 1979 that involved covering over its riverside arched windows with plaster. 

The restoration will bring back those Renaissance features, Kennedy said. 

The hotel is scheduled to open Nov. 1, 2003. 

TransPecos Financial Corp. arranged financing through a subsidiary, Security State Bank of Pecos and co-agent Citibank Lubbock. 

The lenders are a group of independent community banks, he said, who are providing construction loans and permanent financing. 

The Watermark will be beside Crockett Street, opposite La Mansion del Rio Hotel on the River Walk. 

The economic impact of the two hotels is estimated to be in excess of $16 million in goods and services and $15 million in payroll in 2004, the Watermark's first full year of operations. 

A key feature will be a 16,600-square-foot European-style spa and fitness center that will occupy two floors. 

The roof level will include a 2,000-square-foot fitness facility designed as a solarium that looks down on a pool and sun deck. 

In the 99 guest rooms and suites, visitors will find high ceilings, marble baths, Jacuzzi baths, living areas of 400 square feet to 600 square feet and views of the river and San Antonio skyline. 

When completed, the hotel will total 121,182 square feet. The original Karotkin had 70,000 square feet. 

The Karotkin project is part of the Crockett Street Redevelopment Project, a public-private partnership intended to revitalize the Karotkin, Aztec and Peterson buildings. 

The Peterson has been converted to apartments, and the Aztec is proposed to be a 500-seat large screen theater. 

The street and River Walk level improvements were finished earlier this year. 

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(c) 2002, San Antonio Express-News. Distributed by Knight Ridder/Tribune Business News.