July 24, 2011--Drury Hotels will begin work on its downtown Santa Fe project by converting the former St. Vincent Hospital building into a 181-room hotel, before remodeling the adjoining Marian Hall into a 30-room inn.

A favorable outlook for Santa Fe tourism convinced the firm to start with the bigger portion of the property, project manager Brian Nenninger said late last week.

Based in San Antonio, Texas, Nenninger arrived in Santa Fe on Friday to work on maintenance of the property and prepare the hotel chain's applications for building permits. If the applications are approved quickly, he said, Drury could begin construction before the end of this year.

"Initially, we wanted to get something started on this, and Marian Hall was the lower capital outlay. We just thought that would be a safer move," he said. "But as things have progressed, our executive committee has decided that they'd like to go ahead and tackle the larger portion of the project first. ... In Santa Fe, the overall hotel market is faring fairly well compared to the rest of the country, so it looks like a reasonable thing to do."

The Santa Fe project got started in 2007, when Drury bought the old St. Vincent Hospital property for a reported $20 million from Leo Clodfelter and seven other investors who had bought it from the state in 2003.

Drury soon announced it would develop the property in three phases:

u Rehabilitation of the 57-year-old St. Vincent Hospital, later known as the Villa Rivera building, into a family-style hotel, with a parking garage and retail shops fronting on Paseo de Peralta and a restaurant in the old boiler building.

u Rehabilitation of the 101-year-old Marian Hall into a boutique hotel.

u Three new multistoried suite buildings on the southwest corner of the lot, near the back of the Cathedral Basilica of St. Francis of Assisi.

The city's Historic Design Review Board approved most of the plan two years ago.

Last year, Nenninger told The New Mexican that because of the weak economy, Drury was looking at starting with the smaller Marian Hall part of the project first. But on Friday, he said the company is confident enough that it has flipped the order so that it can do the largest phase first.

"For us, it's not so much a function of dollars and wanting to do the project at the moment," he said. "It's a function of other projects we have winding down and being able to get resources together to get this thing started."

On Thursday, the Santa Fe Archaeological Review Committee approved an amendment to the treatment plan for the property. Stephen Post of the state Office of Archaeological Studies, Drury's archaeological consultant, said the change is necessary because the company recently informed him it would pay no more than $170,000 for additional archaeology -- about half of what was anticipated.

Nenninger said Drury's total archaeological bill will be nearly $300,000, including what it has already paid. He said this includes elective work to explore what has been described as a "whitewashed vault." Post said not enough work has been completed to venture a guess about the purpose of the vault, which is filled in with earth.

Drury Hotels, which began in Missouri in the 1940s, today has 125 hotels in 20 states, including two in Albuquerque and Las Cruces. In addition to new hotels, Drury has eight historic hotels, including the 1929 Alamo National Bank in San Antonio, Texas, which was remodeled into a hotel in 2006, and the 1922 Broadview Hotel in Wichita, Kan., which is to reopen as a Drury Hotel this month.

The Santa Fe project would be the first new hotel in downtown Santa Fe since the Eldorado Hotel & Spa was completed some 25 years ago.

Nenninger said he expects to continue renting the old St. Vincent Hospital property through August to producers of Odd Thomas, a film about a short-order cook who sees ghosts.

Contact Tom Sharpe at 986-3080 or [email protected].

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