Jan. 25, 2012--RALEIGH -- A Raleigh developer has proposed an extended-stay hotel on city-owned land downtown, an addition that supporters say would add much-needed hotel rooms near the convention center.

In a letter to city officials, Doyle Parrish, president of Summit Hospitality Group, said his company has secured tentative financing for a Residence Inn by Marriott. The project is envisioned on Salisbury Street across from the Raleigh Convention Center.

Summit's proposal was presented during a meeting Tuesday of the City Council's Budget and Economic Development Committee. The council's approval is needed before the city can enter into a development agreement.

Before the economic downturn, Raleigh-based Empire Properties reached a deal to turn the vacant Salisbury Street site into The Lafayette, a mix of offices, condominiums and hotel rooms.

But that plan was scrapped after efforts to obtain a loan rubbed up against development deadlines imposed by the city.

Since then, downtown advocates have preached the need for more hotel rooms to make the city's convention center more conducive to hosting large conferences and events.

The current supply of 1,000 rooms is not enough, says David Diaz, CEO of the Downtown Raleigh Alliance. An additional 500 to 700 rooms are needed, advocates have said.

"It's been three years since this site has been looked at," Diaz told council members Tuesday. "It's just sitting there, not generating any tax dollars."

Summit is not the only developer interested in the site. The city also received a letter from Moddie Turay Co., a Washington, D.C., real estate and development firm whose namesake founder is a graduate of St. Augustine's College in Raleigh.

The company expressed interest in partnering with Kimpton Hotels on a 150-room boutique hotel and restaurant, said Raleigh City Manager Russell Allen.

The city will ask all interested groups to submit detailed proposals, Allen said. The deadline will likely be in three to six months.

"They'll have to be more specific about what the building would be like, what the financing would be," he said. "Those are all things we'll be scrutinizing."

The city should ask for written guarantees to ensure the hotel is developed in a high-quality manner, said council members Thomas Crowder and Russ Stephenson, architects known for their emphasis on design.

Council member Eugene Weeks said the city shouldn't let this opportunity pass by.

"Now is the time for us to move forward so we can get some of the business that's going to other cities because of the lack of rooms (in downtown)," Weeks said.

Several proposed hotel projects downtown were delayed or canceled because of a lack of financing amid the sluggish economy. But the local hotel industry has been showing signs of rebounding.

Signs of rebound

The occupancy rate in downtown Raleigh in November was 63.5 percent, up 1.9 percent compared with the same period a year ago, according to Smith Travel Research, a Tennessee company that tracks the lodging industry.

The average revenue per available room increased 4.3 percent to $113.37.

Revenues from Wake's countywide hotel/motel and prepared food taxes are also up 12.6 percent through the first 11 months of last year. The county has collected record amounts of the taxes in eight of those 11 months.

Such growth has caused a number of hotel developers to move ahead with projects.

In Glenwood South, a 126-room Hampton Inn & Suites is under construction and is expected to open by the end of the year. It will be the first new hotel in the downtown area since the Marriott opened along Fayetteville Street in July 2008.

N.C. State University officials have also selected a group of Raleigh developers and a Washington real estate firm to build a 125-room hotel on Hillsborough Street across from the school's Bell Tower. The project will replace Sadlack's Heroes and a retail center that is home to Schoolkids Records.

Staff writer David Bracken contributed to this report.

Garfield: 919-836-4952

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