Construction to begin on Marriott Hotel complex in downtown L.A.

With tourism on the rise in downtown Los Angeles, construction is set to begin on a $172-million Marriott hotel complex that has even bigger aspirations than when it was announced almost a year ago.

Downtown’s thriving hotel market can be seen in the long-anticipated development near the L.A. Live entertainment complex and Staples Center, which has grown by a floor and 15 additional rooms from the original plan.

Now set to be 23 stories, the tower on Olympic Boulevard will house a 174-room Courtyard by Marriott and a 218-room Residence Inn by Marriott under one roof when it opens in summer 2014.

“We’re continuing to see a strengthening of the downtown hotel market,� said hospitality consultant Bruce Baltin of PKF Consulting. “Tourism — from both convention activity and leisure travel — is definitely up.�

He credits L.A. Live and its hotels with stimulating business at the nearby Los Angeles Convention Center and said other visitors are attracted by the redevelopment of downtown over the last decade that has brought in more residents, restaurants and stores.

“When people come for a concert or a game, they tend to stay overnight,� Baltin said.

The new hotel will be built by a consortium led by Williams/Dame & Associates, a Portland, Ore., developer that helped build the condominium towers Evo, Luma and Elleven near Staples Center in the South Park district of downtown.

Bethesda, Md.-based Marriott International Inc. already operates a JW Marriott and a Ritz-Carlton in a skyscraper across Olympic on the campus of L.A. Live, as well as a Marriott Hotel about seven blocks north on Figueroa Street.

This will be the first dual Residence Inn and Courtyard by Marriott on the West Coast, but it’s not unusual to have multiple Marriott brands so close to one another, company officials have said. The hotels have different room prices and serve varying audiences. The Courtyard is a no-frills-style Marriott while Residence Inn, intended for extended stays, has larger units and kitchens.

The hotel will have meeting rooms, a restaurant and a 3,000-square-foot electronic sign on the exterior.

Williams/Dame will develop the hotel at the northwest corner of Olympic and Francisco Street with American Life Inc., a Seattle investment firm. The project will be financed through the federal EB-5 program, which provides green cards to immigrant investors who put up a minimum investment of $500,000 for development in targeted areas.

The immigrants would be considered limited partners and thus co-owners of the project. If the project produces enough jobs to meet standards for the program, as expected, they would qualify for green cards granting residency.

The hotel is expected to create about 800 construction jobs and about 200 permanent jobs after it is completed.

Marriott executives including Chairman Bill Marriott are set to join local public officials and dignitaries Wednesday for a ceremony marking the forthcoming groundbreaking. Preparation of the site, now a parking lot, is set to begin next month with construction to follow shortly after upon receipt of construction permits.

With the closure of the Wilshire Grand Hotel last year, the downtown hotel market is “essentially maxed out� at an average occupancy of about 76%, said Baltin, the hospitality consultant. Room rates are expected to rise but remain cheaper than they are in other popular local destinations such as Santa Monica and Beverly Hills.

Downtown is at a disadvantage compared with other U.S. cities competing for convention business because it still has far fewer hotel rooms near its convention center than others do, according to a report released last month by L.A. Inc., the Los Angeles Visitors and Convention Bureau.

“The average city has 7,300 hotel rooms available within a half-mile of its convention center,� City Councilwoman Jan Perry said. “Los Angeles has less than 1,700. These two Marriott properties will add nearly 400 rooms and boost our city’s competitive edge when it comes to attracting more convention business.�

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