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Hotel Wars Descending on Downtown Seattle

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Stand anywere between the Market and the Needle you can almost hear the thunder of Seattle's hotel wars, the howitzers of the future as they battle for attention in the trades, the travel mags, the lifestyle glossies.

It was five years ago that Barry Sternlicht, then the owner of Starwood Corp., announced a project called 1 Hotel for a site at Second and Stewart. Starwood is the umbrella for the Westin, Sheraton, W, Meridien and St. Regis chains (among others), a colossus. The bulldozers dug a huge hole at the site (even as the Hotel 1000 grabbed the project's name); then financing disappeared and the hole was filled again.

Didn't matter much: in addition to the 1000, the ultra-elegant Four Seasons and cozy Arctic Club opened downtown; the Fiarmont took over the stately Olympic, the Sheraton added an entire second tower, the the Pan Pacific opened in South Lake Union, the Deca took over the University Towers, the Grand Hyatt (and its cousin, the Hyatt at Olive 8) and the Max moved into midtown. The Marriott opened a waterfront property while across Alaskan Way, the Edgewater remodeled. So did the Renaissance, formerly the Madison. All of them collect a 15.6 percent "hotel tax" in addition to state sales tax and--since this summer--a self-imposed $2 fee per room per night to fund tourism promotion efforts.

Seattle's visitor count dipped six percent between 2008 and 2009, dropping below nine million after six years of steady growth. Still, with the slow recovery, there's enough optimism among tourism officials to look at the current level of 9,000 downtown hotel rooms and see a need for more inventory. The lead player in the recovery is a longtime owner of top hotel properties, Richard Hedreen. He's got the original Hilton, both Hyatts, the Renaissance and its neighbor, the Crowne Plaza. Now he's coming in with a 1,200-room project at 8th and Stewart that will be the city's second-largest (after the Sheraqto).

The battlefield is littered with projects that never caught fire, never got financing: the Candela, for example, a 36-story project at Second & Pike that called for 150 guest rooms, 90 condo units, and, of course, a restaurant, envisioned by local boy and venture capitalist Tim Piggott (the PACCAR family), who planned a chain of Candelas around the world catering to luxury travelers.

But for every stillborn project there's a new venture coming. A 23-story project at Statium Place; a 14-story Hilton at Boren and Howell, something at First & Stewart; something across from the Westin on Fifth. A boutique at Second and Pine, a 38-story colossus after all at 2nd and Stewart.

Tourism is big business in the Seattle region. King County Executive Dow Constantine points out that 50,000 jobs in the county depend on tourism. Nine million travelers visited King County last year, spending $5.5 billion and generating $440 million in local taxes. In fact, it's Washington's fourth largest industry, generating 150,000 jobs and a billion dollars in tax revenues statewide.

David Blandford of the Seattle-King County Visitor Bureau (the marketing arm of the state Convention Center) points out those tax revenues, the billion dollars associated with tourism, are paid by visitors, not local taxpayers. Taxes generated by tourism lower the tax bills of in-state households by nearly a thousand dollars a year, Blandford says.

With hotel occupancy at 76 percent, and the Convention Center looking at plans for a major expansion, there's clearly room for more rooms. If every project currently on the books gets built, Seattle's hotel inventory would rise by 15 percent, or half a million room nights a year: over $10 million in additional taxes for the city and county.

Will everything get built? Probably not. But how else except from the shell casings of the hotel howitzers will the editors of travel mags determine what to cover, how else will the trendsetters learn where they want to live? How indeed will clueless travel agents figure out where to send their sheep? How else will Seattle maintain its status as an enviable place to visit, a desirable place to live?

-- Ronald Holden

Olive 8

737 Olive Way, Seattle, WA 98101

Stadium Place

201 King Street, Seattle, WA