April 4, 2009 - At a time when the East Valley economy is slowing to a crawl, hotel construction is providing one of the few engines of expansion.

Among the new projects nearing completion or newly open are a Hyatt Place hotel at the Mesa Riverview development; the 197-room Hilton Phoenix/Chandler in the Price technology corridor; four new hotels at Price Road and Loop 202 in Chandler; and two huge casino/resorts on the Gila River and Salt River Indian communities.

Also recently completed is a $10 million refurbishing of the Holiday Inn at Country Club Drive and U.S. 60 in Mesa and a boutique hotel in the historic Drew Building in downtown Mesa.

The new projects offer something for just about all tastes: luxury spas, casinos, business-meeting facilities, extended stay amenities and historic lofts in an urban setting.

The reason so many hotels are still being built is that those projects often require long lead times for planning and construction. Therefore, they received financing commitments before lending dried up, said Kristen Jarnagin, communications vice president for the Arizona Hotel and Lodging Association.

"Hotels can take up to two years to build," she said. "It's not an overnight decision."

Still, the timing is such that the new properties are opening in the trough of a deep economic recession. According to the association, the occupancy rate for Valley hotels in February, that latest month available, was down 19 percent from the same month a year ago. Last year, of course, the Valley hosted the Super Bowl, which skews the figures somewhat. But nationally hotel occupancy is down about 10 percent year-over-year.

Opening the new hotels in a recession doesn't necessarily mean they'll be unsuccessful, Jarnagin said.

"After 9/11 we had three large hotels open in 45 days with a total of 2,200 rooms, which was the largest opening anywhere in the U.S. after 9/11. And people thought at that time it would be over-saturation," she said. "But the economy rebounded, and they all thrived."

The $30 million Hyatt Place, 1422 W. Bass Pro Drive, will open on April 14, said General Manager Candy Greff.

Developed by Oakland A's owner Lewis Wolff, the four-story, 150-room hotel is aimed at both the leisure and business markets, she said.

It will feature a great room with fireplace instead of a conventional lobby and guest rooms that are 25 percent larger than typical hotel rooms.

Global Hyatt Corp. is expanding its Hyatt Place brand in the Valley, with another location planning to open in Gilbert late this month.

Meanwhile, Brian Thune, owner of the Lofts at the Drew, is converting eight former apartments upstairs into hotel rooms. Six of the eight are available to guests now, and the two others will be completed soon, he said.

Half are studio rooms and half have one bedroom, he said. They have full kitchens, 10-foot ceilings, maple hardwood floors and some have exposed brick walls.

Thune purchased the historic building at 39 W. Main three years ago and hopes to attract extended stay, corporate and spring training guests, or anyone who likes to take a trip back in time.

"I was in the hotel business for eight years, and I have never seen anything like this," he said of the Drew building. "People have a fascination with this building, so we thought 'why not take it a step further and let more people experience it?'"

The brick structure, which has been nominated for the National Register of Historic Places, was built by Mesa Lumber Co. owner F.P. Drew in 1921. Originally the ground floor was occupied by a market, with apartments above. Beginning in 1940 and for years thereafter the ground floor was occupied by furniture stores. Today women's and children's clothing stores occupy the retail space.

Thune said the Drew reminds him of buildings in Old Town Pasadena that he saw when he was growing up in Southern California.

"It's a true loft, with residential above retail," he said. "It's synonymous with the way buildings were done in the early part of the (20th) century."

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