July 18–Two large hotels are coming to Hillsboro, ending years of near misses for developers of a project that city officials say will create a “landmark” along U.S. 26.

Construction on both projects, a seven-story 165-room Embassy Suites adjacent to a four-story 106-room Hampton Inn & Suites, is expected to begin within the next few weeks.

“The good news is it’s definitely on,” Gary Griffiths, principal with Salt Lake City area developer Western States Lodging, said. “It’s a question of when.”

The hotels add much-needed meeting space to the community, according to city planners, local business leaders and lodging advocates, and come at a time when Hillsboro’s hotels are increasingly in demand, leading to higher rates for customers.

Colin Cooper, Hillsboro’s assistant planning director, said the city is riding “a very strong business sector led by Intel” and other businesses in the Tanasbourne and AmberGlen communities near the hotel site.

The 4.9-acre property is on Northwest Tanasbourne Drive, west of Northwest John Olsen Avenue. The development means more people will stay and spend money in Hillsboro. “We’re just really excited,” Cooper said.

Embassy Suites brings name recognition to the Hillsboro market, and a so-called full-service hotel — with a new restaurant, room service and several meeting rooms. “You’d expect an Intel or a SolarWorld or a Nike to have access to that kind of facility,” Griffiths said.

Griffiths and Carolyn McCormick, president and CEO of the Washington County Visitors Association, say those corporate travelers are forced to stay in downtown Portland or Tigard.

McCormick’s nonprofit WCVA subscribes to STR Global, the international hotel market analysis company, for monthly data on Hillsboro’s hotel occupancy and rates.

According to the most recent data, McCormick said, Hillsboro’s average daily hotel rate was $114 per night. That’s higher than Tigard, Wilsonville and Beaverton, McCormick said.

Hillsboro’s hotels had an 83.2 percent occupancy rate, according to McCormick, which she termed a “really good thing.” Once built, the two hotels represent a 24 percent increase in the number of total rooms in Hillsboro.

After nearly breaking ground on two separate occasions, 2008 and then again last summer, the original property owners sold the land use documents, development plans and property itself to Western States Lodging and two other business partners in April.

Inn Ventures, the former owner, sold the two properties for $6 million, according to Washington County tax records.

Griffiths said it’s “definitely atypical” for his company to purchase a shovel-ready project. Hilton Worldwide approached Western States Lodging to gauge interest in buying the Hillsboro hotels’ property and plans in November, according to Griffiths. Embassy Suites and Hampton are Hilton Worldwide companies.

The hotel sale is emblematic of the treacherous nature of securing financing for large projects in uncertain economic times, according to Griffiths and industry observers.

Inn Ventures lost a bank loan in 2008 when the company was just a month away from breaking ground, Vice President of Development Roger Collins said last summer. Last year, again, the company indicated it was close to breaking ground, but the construction never happened. Inn Ventures couldn’t be reached for comment for this story.

Bill Perry, vice president of government affairs with the Oregon Restaurant & Lodging Association, said financing is the main hurdle for hotel projects.

Many developers, Perry said, will have five potential projects in the works, only to have one be successful.

The two hotels could force other competitors to make improvements, according to Perry. “I think you’ll see a lot of the properties upgrade in that area.”

Cooper said adding a landmark to U.S. 26 is a key aspect of the project. Perry concurred, saying the name recognition from the freeway is “a pretty big deal.”

— Andrew Theen