Aug. 11, 2006 - CHEYENNE -- Ground work started this week on a project that will bring a new hotel and two Class A office buildings to East Fox Farm Road.

Kim Andereck, a member of the group that is developing the Gateway South project, said the hotel is going to be a SpringHill Suites. That facility, made up all of suites, is intended for visitors who need to stay here for several weeks at a time.

"It's a product that goes beyond hotel rooms, and there's a need for that here," he said.

This project replaces a 14-story office building that the developers had proposed earlier this year.

Part of what derailed the office tower is a limestone ledge that's about eight feet below the surface of the property.

That was a costly hurdle that could not be overcome on a four-acre parcel that dictated the need for underground parking, Andereck said.

"We could blast it at a cost of $14,000-$17,000 per space," he said, adding that the economics made no sense.

While they still have plans to build an office tower elsewhere, Andereck said Thursday that he and his partners are moving ahead with this project now.

The three-floor hotel property, complete with pool and health club, is expected to be completed next June. Work will start on the office buildings -- both also expected to be three stories -- at about the same the hotel project wraps up, he said.

In all, the project is expected to cost between $18 million and $20 million.

The hotel is going up next to an established Cheyenne lodging property, the Holiday Inn.

Robert Harmon, general manager there, said more people coming to south Cheyenne will help everyone.

"We have been preparing for an 85- to 90-room property to come into the market," Harmon said. "This will help the city because we will have more upscale rooms, and it may help us with facilitating larger conventions (at the Holiday Inn) because they will be on this side of town."

The Holiday Inn is investing $4.5 million in its own renovation project, which is under way.

Darren Rudloff, president of the Cheyenne Area Convention and Visitors Bureau, said the addition of the suite property just off Interstate 80 will strengthen that exit as a draw for visitors.

"We'll have two significant properties there, and it will be near Laramie County Community College, where a number of events, meetings and conferences are held," he said.

"It'll be a positive thing for south Cheyenne, and the two hotel properties being next to one another will benefit both of them."

Andereck said one of the partners in his project is Kinseth Hotel Corp., an Iowa City, Iowa-based company that owns and operates about 40 hotels and 10 Bennigan's restaurants in the Midwest.

"They have become interested in Cheyenne," he said. "They feel the market is placed for growth, and the current inventory of hotel product is not adequate to serve its future needs."

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