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The Former Fresno Hilton Will be Gutted and Redeveloped
 by McSam Hotel Group and Packard Realty Inc.
By Robert Rodriguez, The Fresno Bee, Calif.McClatchy-Tribune Business News

Nov. 22, 2006 -- Plywood covers a few broken windows, the carpet smells musty and pigeons, not people, roam the dance floor of the famed Skyroom on the top floor of the former Hilton Hotel in downtown Fresno.

Despite its roughness, New York hotelier Sam Chang, of the McSam Hotel Group, promises to bring the aging hotel back to life.

Chang's representatives were in Fresno on Tuesday meeting with city officials and business leaders about their plans to pour more than $5million into renovating the 190-room, nine-story hotel. He bought the property for an estimated $5.5 million.

"This hotel will be stripped down to the drywall. It will be completely gutted," said Michael S. Goldstein, president of Packard Realty Inc. of San Diego, whom Chang hired to manage the hotel project. "This will be a brand new hotel when we open."

Planned to open during the fourth quarter of 2007, the hotel will either be a Holiday Inn or a Crowne Plaza, Goldstein said. The company is in negotiations with both hotel chains, he said.

Once a hotel chain is selected, construction could begin as soon as early next year.

What happens to the Skyroom, a 1,600-square-foot former night spot enclosed in glass with a dance floor, stage and an outdoor patio, will depend on the new design of the hotel.

"It makes sense to keep it," said Steven Carr, director of construction for Packard Hospitality Group, a division of Packard Realty. "But that will depend on the franchisee."

Chang's interest in the Fresno hotel is part of an overall push to buy and develop hotel properties on the West Coast. Goldstein's company is working with Chang on four projects, including one near Disneyland and another in Valencia.

Chang was attracted to the hotel because of Fresno's growth potential, the overall condition of the hotel and the support from the city, Goldstein said.

"When you see something like this come down the pike, you jump on it," he said.

On the East Coast, Chang is a well-known developer of hotel properties.

He has more than 1,000 hotel rooms under construction and many more on the drawing board.

He was named Holiday Inn Hotel Developer of the Year in 2004.

City leaders hope the new hotel will provide momentum to Fresno's downtown revitalization and add much-needed hotel beds for travelers and conventiongoers.

Wayne Bennett, executive director of the Fresno City and County Convention and Visitors Bureau, said the city needs another full-service hotel to meet the demands from large-scale conventions. He said the addition of another 190 rooms near the Fresno Convention Center will be a huge benefit.

"People like being close to the convention center," Bennett said. "And this will help."

Karen Davey, general manager of Via Adventures, a tour and charter bus company in Merced, said the new hotel could boost her business as well.

"Most of the business we get in your area is based on referrals from your convention and visitors bureau," she said, referring to Fresno. If the new hotel allows the convention center to boost attendance or book larger events, that referral business could increase, she said.

Marlene Murphey, executive director of the city's Redevelopment Agency, said she is pleased that after four years of vacancy, the former Hilton will once again be a center of downtown activity.

"This will also be 130,000 square feet of additional people and activity downtown," Murphey said. "This will enliven the area."

City Council Member Cynthia Sterling agreed. "This is a real Thanksgiving," she said. "I can really see the resurrection of downtown."

Sterling and others pointed to other downtown building projects, including Chukchansi Park, the Internal Revenue Service building, the convention center expansion and the new federal courthouse.

Downtown advocate Lorena Martinez said the interest in Fresno's downtown by outside investors could trigger others to take a new look.

"When you have a huge developer investing in Fresno, it says a lot about our potential," said Martinez, executive director of the Downtown Association. "And it is awesome that people recognize that fact."

Perhaps no one was as thankful for the hotel sale as real estate agent Roger Story, who has tried for four years to find a buyer. Several proposals were floated, but none materialized.

"Of course, people have asked me, 'Will they make this work?'" Story said. "And I am confident that they will."

Bee staff writer Jeff St. John contributed to this report. The reporter can be reached at brodriguez@fresnobee.com or (559) 441-6327.

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Copyright (c) 2006, The Fresno Bee, Calif.

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