Mar. 27--A recovering economy and planned tourist attractions such as the Clinton presidential library have some hotel operators setting their sights on downtown Little Rock. 

Those operators are betting at least $31 million on the success of $270 million in hotel investments under way and projects planned for the area. 

And real estate agents say developers are taking a hard look at building a hotel in the heart of the River Market District. 

"We have two different, quality hotel developers who have approached us and are interested in the River Market District," said Rett Tucker, a partner at Moses Tucker Real Estate. 

Two hotels near downtown, The Legacy and The Best Western InnTowne Hotel, recently were sold and will undergo face-lifts. A third, the former City Center Hotel, is to open in July as a Radisson Hotel, and the sale and renovation of a fourth, The Masters Economy Inn, is likely. 

The renovations are shaping up just as Arkansas' Excelsior Hotel has completed its $40 million transformation into the Peabody Little Rock hotel. 

Among projects that spawned recent interest in downtown hotels are construction of a 12-story Acxiom Corp. office building and plans for the Clinton library, the Heifer International headquarters, and the Game and Fish Commission's Nature Center. Plans also include multimillion-dollar projects to convert two downtown railroad bridges into pedestrian crossings. 

Tucker and others say the Clinton library and Heifer International complex should attract hundreds of thousands of visitors annually and help raise the fortunes of downtown hotels. 

In the past two years, downtown hotel operators have seen faltering revenues, resulting from falling occupancy rates and stiff competition from west Little Rock's burgeoning hotel sector. Hotels across the country have suffered from a cooling economy in the aftermath of Sept. 11's terrorist attacks. 

The hotel industry boomed in the 1990s, said Robert Mandelbaum, director of research with PKF Consulting in Atlanta, which advises hoteliers. 

"It was very profitable and peaked probably in 2000," Mandelbaum said. "Then the hotel industry began suffering because of the economy in 2001. Sept. 11 exaggerated that." 

Mandelbaum said that economic downturn made it difficult for some hotel owners to cover their debts and prompted many to sell. At the same time, Mandelbaum said, cash-rich financiers are on the lookout for good deals. 

"There are definitely a lot of individuals with the cash to buy hotels," Mandelbaum said. "There isn't a lot of money to lend to build new hotels, though." 

The Clinton presidential library will sit on 28 acres east of the River Market District. Planners say the complex, to open in 2004, should attract 300,000 annually to Little Rock. 

The final design of Heifer International's headquarters is undecided, but the facility will occupy 30 acres and will include exhibits on the organization's efforts to fight hunger and poverty overseas, said spokesman Ray White. 

Tucker declined to name the developers interested in building a hotel in the River Market District but said they wanted locations close to the downtown attractions. 

"They want to be within walking distance of the convention center and the Clinton library and the other hotels," Tucker said. 

The Clinton library, Heifer International and general success of the River Market District "should bring in a half a million people a year," Tucker said. 

However, not all are convinced that downtown improvements will live up to the anticipated wave of tourism. Tom Ferstl, a Little Rock real estate appraiser, praised the success of the River Market District but is convinced that the ambitious hopes of the hotel investors will be realized. 

"They all got caught up in the idea that at some point in time the Clinton library is going to bring extra thousands of people to Little Rock," Ferstl said. "That hasn't been proven yet." 

Hotel operators need to begin preparations now to capitalize on anticipated growth, however. 

"It makes absolute sense because a lot of these properties need to be developed now for that three- to five-year project out in the future," said James Schimmer, executive director of The Downtown Partnership, a nonprofit group made up of business leaders. 

The recent opening of the upscale Peabody Little Rock hotel will attract business to regional hotels, Tucker said. 

"We feel like the Peabody is going to lift the whole market," he said. 

Work on the City Center Hotel, a former Holiday Inn and future Radisson, started in June and will cost about $2 million, said Alex Patel, who is overseeing the renovation and is part-owner of the hotel at 617 South Broadway. 

The aim, Patel said, is to pull the image of the 30-year-old building out of the 1970s and bring it up to the standards of the Radisson chain. 

If all goes according to plan, the hotel will provide a midrange niche ideal for traveling businessmen and government employees. 

"With the Peabody ... there will be better conventions," Patel said. 

Work on the 262-room future Radisson should finish in time for an opening July 1, Patel said. 

Amin Amarshi bought the Legacy Hotel at 625 W. Capitol Ave. four months ago and said he hopes to reopen it this summer as a Cambridge Suites. 

"The lodging industry is going to come up," Amarshi said. "The market is there, and there are a lot of interesting things going on in Little Rock." 

Larry Carpenter, owner of commercial real estate firm Carpenter & Co. in Ellisville, Mo., paid more than $3 million in the past two weeks to acquire the Best Western InnTowne at Sixth Street and Interstate 30. 

He said he plans to spend another $3 million in the next couple of months to acquire the Masters Economy Inn at 707 I-30 across from the Best Western. 

The two hotels will be the first he's owned. A three-man management team will own a minority of the two hotels. 

Carpenter said he will spend $5 million to $6 million to make a "major paradigm overhaul" of each hotel. When completed, the Best Western will have 152 rooms, an addition of about 25 rooms, and the Masters Inn will have 175 rooms, about five more than it currently has. 

One of the hotels will be a Holiday Inn, Carpenter said. He is still deciding which affiliation the other hotel will have. 

Carpenter said he hopes the renovation will be complete by early next year. 

"All of us in the hospitality industry have been very careful following Sept. 11, the anthrax scare and the slowing economy to be sure that properties will fit into a special niche market," Carpenter said. 

The Best Western and the Masters Inn will be within two miles of the Clinton library and are within walking distance of the Acxiom building. 

"We believe that because of some prior investments in Little Rock that the bell curve is still going up," said Carpenter, who recently sold his outdoor advertising business in Missouri to Viacom Inc. "We think we're timing our entry into the market as perfectly as anybody could." 

The occupancy rate at Little Rock's upscale hotels was down last year to 59.7 percent from 61.4 percent in 2001, according to Smith Travel Research. 

January's occupancy rate was 50.7 percent, down from 61 percent in January 2001 and 53.1 percent in January 2000, according to Smith Travel Research. 

A $13 million renovation will begin this summer on the Little Rock Hilton on University Avenue at Interstate 630, and its managers say they're in the ideal location to make the most of growth in downtown and west Little Rock. 

"It's a great investment," said Debra Guyot, the hotel's director of sales and marketing. "We have a lot of growth in all different directions [that] makes this location a prime site." 

The 263-room hotel has not been remodeled since it was built in 1979, Guyot said. 

The Riverfront Hilton in North Little Rock, across the Arkansas River from the Peabody Little Rock hotel, is undergoing a $6 million renovation. The Riverfront Hilton already has upgraded all 220 rooms and 12 meeting rooms, said Tom Roy, chief financial officer for Frank Fletcher Cos., which owns the hotel. 

The Riverfront Hilton should complete its exterior face-lift by January, said Roy, who also is interim general manager for the hotel. 

Work on the exterior will begin within the next two months, Roy said. 

Barry Travis, executive director of the Little Rock Convention and Visitors Bureau, said demand for more hotel rooms is growing in downtown but he isn't sure the area is ready for a new hotel. 

However, "when the market is ready to bring a new hotel room in, everybody gains," Travis said. 

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(c) 2002, Arkansas Democrat-Gazette. Distributed by Knight Ridder/Tribune Business News. ACXM, SXC,