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Developer Clement Chen Signs Licensing Agreement with IHG; Will Flag
 $70 million Project on Monterey, California's Cannery Row -
 InterContinental The Clement Monterey
By Marie Vasari, The Monterey County Herald, Calif.McClatchy-Tribune Regional News

Sep. 28, 2007 - Cannery Row's hotel project is now an InterContinental Hotels & Resorts brand.

The Cannery Row Hotel Development Venture L.P. announced a licensing agreement Thursday with IHG, the owner of InterContinental Hotels & Resorts.

Currently under construction at 750 Cannery Row in Monterey, InterContinental The Clement Monterey is scheduled to open in the second quarter of 2008.

Next to the Monterey Bay Aquarium, the project features three buildings with 8,500 square feet of indoor meeting space, 5,000 square feet of outdoor event space, a restaurant and bar, a spa and a fitness center with an outdoor lap pool. Construction started in August 2006.

"InterContinental The Clement Monterey adds to our growing presence on the West Coast and further strengthens the brand's resort portfolio," said Steve Porter, IHG's president overseeing the Americas. "Monterey is a beautiful destination and its history and charm are an attraction for leisure, group and business clientele."

"I will say that we are very excited to have signed an agreement with InterContinental Hotels," said San Mateo developer Clement Chen III. "It's a great brand."

Chen, who originally considered taking on the Westin brand, said he'd shifted his thinking toward remaining independent but was impressed by what InterContinental offered in name recognition and favorable reputation among meeting planners.

And for Monterey County, where leisure travel slows considerably after Labor Day, that's an important market to attract, he said.

"They're very fine, upscale hotels that have an excellent reputation both with the individual traveling public, but particularly with meeting planners," Chen said.

Carrying the InterContinental brand will give the Monterey hotel a competitive edge from the day it opens.

"They'll know instantly the type of hotel they can expect," said Chen. "It'll allow us to get the hotel off to a terrific start from day one, while if we were to be unbranded, in time you can establish a great name, but it does take time."

Operating as a franchise allows for shared marketing and advertising resources, he said, along with the strength of the InterContinental e Priority Club Rewards program, which extends across all of the company's brands.

InterContinental Hotels Group company spokesman Stephen Boggs said the deal was reached Sept. 21.

Based in the United Kingdom, InterContinental Hotels Group PLC (NYSE:IHG) describes itself as the world's largest hotel group by number of rooms. Through various subsidiaries, the company owns, manages, leases or franchises approximately 3,800 hotels and 563,000 guest rooms around the world.

Brands in its portfolio include InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels and Resorts, Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo.

The company, which has its American headquarters in Atlanta, is in the midst of a West Coast expansion as a gateway region to the Asian market, said Boggs.

Monterey marks the fifth InterContinental property in the western United States: The InterContinental Mark Hopkins San Francisco opened in 1999; the InterContinental Los Angeles Century City opened in January; InterContinental San Francisco is scheduled to open in January 2008; and InterContinental Montelucia Resort & Spa Paradise Valley will open in summer 2008.

Frank Donangelo, vice president of planning and development for the Cannery Row Company, said the hotel project fills in a much-needed gap in Cannery Row's landscape and will boost the city's tax base through sales and hotel room taxes.

"It makes so much sense for the Row," he said. "This at last fills this area, and it complements all the businesses that are there."

The Cannery Row Company, which owns the property on which the hotel is being built, extended a 99-year land lease to Chen. Under the agreement, Chen will operate the hotel, a restaurant and parking garage, while the Cannery Row Company will oversee the retail operations on the site.

Development costs have been set at $70 million to $80 million. The hotel project has been struggling to get off the ground since 1983, when the site plan for the project was approved.

Chen, who became involved in the Cannery Row project four years ago, said his goal is to have the hotel open for business before Memorial Day.

He declined to disclose the contract terms other than to describe it as "a long-term agreement."

"I think it's going to be beneficial both to the hotel and the InterContinental system," said Chen. "It's going to be a tremendous boost to us to really come out of the starting gate strong."

Marie Vasari can be reached at 646-4478 or

mvasari@montereyherald.com.

For information about the InterContinental Hotels Group, see www.ihg.com

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To see more of the Monterey County Herald, or to subscribe to the newspaper, go to http://www.montereyherald.com.

Copyright (c) 2007, The Monterey County Herald, Calif.

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