Apr. 19--OGDEN, Utah--Over hoteliers' dire predictions of bankruptcy and ruin, the City Council approved a $1.7-million loan and $2.25 million in tax increments to help a Salt Lake developer turn the historic Eccles Building into a posh hotel. 

Vasilios Priskos will begin construction on the $11-million make-over May 1, with plans to finish by Dec. 15. The 130-room hotel will be part of the Crowne Plaza hotels, an upscale chain of Holiday Inns. 

The building, located on Ogden's downtown corner of 24th Street and Washington Boulevard, was built in 1913 as an office building. In the past few years, it has been empty as California owners waited for someone to buy the building. 

The city has been trying for several years to interest developers in the building because of its proximity to the conference center and mall. 

Council members split 3-2 in their decision to subsidize the development. Councilman Bud Mitchell agreed with Ben Lomond Hotel manager Jim Budge who said giving money to Priskos was unfair to other hotels in the area. 

"If you apply the fairness test to this situation, I don't believe it passed the litmus test," Mitchell said. 

Before the vote, Budge told the council that room occupancies have declined from 72 percent in 1992 to 58.80 in 2000. 

"Our market area has an over supply of guest rooms that go empty every night," he said. 

Budge also complained that with Ogden's help, Priskos would be able to offer low room rates that would take away other hotel's business. Priskos has said the hotel could be successful by charging room rates as low as $65 a night. 

Business and Economic Development Director Stuart Reid pointed out that providing gap financing is nothing new in Ogden's downtown hotels. At one point, the city subsidized the Marriott Hotel to the tune of $5.7 million, he said. 

"Whenever we make an investment like this we are making a conscious decision to affect the markets," he said. 

He also said that the same banks that will not finance a hotel in downtown Salt Lake City are backing this proposal -- giving a good indication the project can be successful. 

Mayor Matthew Godfrey said that without the gap financing, the city risked having the building remain vacant for years. Priskos told the council he had tried to sell the building for five years, with no takers. 

That didn't convince council member Fasi Filiaga, who said he didn't believe the project would be successful. 

"We're giving good money to a place we don't know what's coming," he said. 

Chairman Ken Alford disagreed. He said if the council "circled its wagons" to protect existing businesses, Ogden would remain static. "We need to look ahead." 

Members Mary Hall and Rick Safsten were out of town and did not attend the council meeting. 

-----To see more of the Standard-Examiner, or to subscribe to the newspaper, go to http://www.standard.net 

(c) 2001, Standard-Examiner, Ogden, Utah. Distributed by Knight Ridder/Tribune Business News. BAS,