Oct. 12--A Cleveland developer has delayed construction of Detroit's first new downtown hotel in almost 10 years amid a nationwide slowdown in hotel building after the Sept. 11 terrorist attacks. 

The Ferchill Group was to have started construction last month on a 198-room Hilton Garden Inn at Brush and Gratiot in Harmonie Park. Now construction isn't expected to begin until the end of the year, at the earliest, Timm Judson, Ferchill's chief investment officer, said Thursday. 

The delay is the result of an institutional lender "looking at the loan with a bit more caution," Judson said Thursday. 

He declined to identify the lender but said, "The events of Sept. 11 just absolutely decimated the hotel lending market." 

It's the second time in two years that a hotel planned for downtown has had trouble getting financing. 

In July 2000, the Whitney Hotel Group sold the David Whitney Building after failing to secure $21 million in construction money from local commercial banks. 

Marriott International Inc., the largest hotel company in the United States, has postponed building about 5,000 hotel rooms because of reduced demand. 

Starwood Hotels & Resorts Worldwide Inc., the world's biggest hotel owner, also delayed projects when U.S. hotel revenue fell 37 percent the week after the attacks and 24 percent the next week. 

The decisions to delay construction show that industry leaders don't expect demand to return to normal at least until 2003. 

Room completions are expected to fall 28 percent next year, to 81,800, the lowest since 1995, according to PricewaterhouseCoopers. 

The 10-story Hilton Garden had been expected to open in fall 2002. The $26.5-million hotel would be the first newly constructed downtown hotel since the Atheneum Hotel opened in July 1992. 

Ferchill is considering building a 500-space parking garage next to the hotel, Judson said. 

-----To see more of the Detroit Free Press, or to subscribe to the newspaper, go to http://www.freep.com Copyright: (c) 2001, Detroit Free Press. Distributed by Knight Ridder/Tribune Business News. HOT, MAR,