Columbia City Council today will hold a public hearing on a $3 million federal loan to help build a hotel on Sunset Drive.
The $7 million MainStay Suites hotel would be near the S.C. 277 expressway and Palmetto Health Richland on property owned by the Columbia-Sumter Empowerment Zone.
If built, the MainStay will be one of the few new hotels to be constructed in the Columbia area next year. New construction here is expected to grind to a halt because of the credit crunch and dropping occupancy caused by state budget cuts.
Attempts to reach hotel developer Raj Champaneri and Columbia Community Development director Tony Lawton were unsuccessful.
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The city's community development department administers federal grants and tax incentives for businesses that locate in the empowerment zone, which encompasses the city's poorest neighborhoods.
However, a spokeswoman for Mainstay's parent company, Choice Hotels, said the extended stay hotel hopes to draw customers from downtown hospitals.
"It makes sense because (the hospitals will generate customers) who want to enjoy the comforts of home," Heather Soule, the company's manager of corporate communications, said from her Maryland office.
"(The suites) will have everything a person will need, from kitchen appliances to silverware."
Tom Sponseller, CEO of the Hospitality Association of South Carolina, said the location could be a good one.
"Hotels go where there is demand," he said. "Next to a hospital makes sense because unfortunately you will have people stay there to be with patients."
Sponseller said the developers probably need the empowerment zone loan to leverage a standard commercial construction loan.
This year, banks have clamped down on credit, and the hotel occupancy rate in Columbia has dropped to 57 percent, down 8 percentage points from 2008.
Rates dropped 9 percentage points in business-driven Greenville in the same time period. Myrtle Beach and Charleston were down less than half of that.
"People are still vacationing," Sponseller said. "But business travel is down, and state employees aren't traveling."
Statewide, occupancy is 53 percent, down 12 percentage points from 2008.
Sponseller said there are only a half dozen hotels under construction or in the process of being built. "But if they aren't under construction now they might not get built," he said.
The four-story, 57,000-square-foot MainStay Suites hotel will have 81 rooms, according to documents filed with the city.
The hotel will create about 30 jobs "and will serve as a catalyst to additional private development in this area," the documents state.
The documents don't say when construction might start or be completed.
Choice Hotels is the parent company of nine brands - Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Econolodge and Rodeway Inn.
It has 6,900 franchised hotels and 48,500 rooms in 35 countries.
The company has 700 hotels under construction or in development, Soule said.
Despite the economy, the company is moving forward with new hotels, she said, because of its diversity of properties.
"We are doing much better than many (other hoteliers) because we have a huge portfolio for all types of travelers," she said.
The public hearing will be held during City Council's regular meeting, which begins at 9 a.m. at City Hall, 1737 Main St.