Holly Springs may get a hotel

Holly Springs appears close to landing its first hotel.

Telemark Hotel Developers of Cambridge, Wis., filed plans this month to build a 124-room Hampton Inn & Suites off Ralph Stephens Road, southwest of its intersection with N.C. 55 Bypass.

It's the latest sign of growth in the western Wake County town -- and something town leaders have been wanting for some time.

"It's been part of our recruitment strategy to bring more services to the town that residents need," said Jenny Mizelle, the town's economic development director. "Whenever someone comes to town and they need a hotel, they have to stay in Fuquay, Cary or Apex."

Since 2000, the population of Holly Springs has more than doubled to about 21,500 residents. Many were lured to housing that was inexpensive compared with nearby Cary or Raleigh. The migration was helped by the opening of the N.C. 55 Bypass, which improved access to Research Triangle Park and other employment centers in the region.

And despite a lending crunch that has slowed new construction, the town population is expected to increase by about 37 percent in the next decade.

A hotel also would benefit customers, vendors and executives of companies such as Novartis, which is building a vaccine plant in the town that is expected to eventually add 350 jobs.

Plans for the four-story Hampton Inn, which is owned by Hilton Hotels, were filed this month. It would be the first North Carolina inn for Telemark, which, according to its Web site, has built only in Iowa and Wisconsin.

The hotel would be in the town's Southern Gateway area, where a Wal-Mart was recently built and where a grocery-anchored shopping center is planned.

The Town Council is scheduled to review the hotel plans in January.

If approved quickly, Telemark executives hope to begin construction in the spring and wrap up by early 2010.

The developer seems to have already cleared the biggest hurdle: financing.

Telemark has the equity and a committed lender for the project, says Al Whitehouse, vice president of acquisitions at Prism Hotels & Resorts, a Dallas company partnering with Telemark. He declined to name the financier.

Lenders have been tightening up across the country, requiring more equity from all developers.

Financing for hotels has become particularly difficult. The slowing economy has pinched leisure and business travel, just as the country winds down a room boom.

At least 1,900 new rooms are expected to open in the Triangle by the end of 2009 -- the biggest increase in a decade. At the same time, occupancy at area hotels averaged 63.2 percent in the first seven months of 2008 -- a three-year low, according to data from Smith Travel Research, a Tennessee company that tracks U.S. hospitality trends.

But Telemark no doubt feels comfortable -- and welcome -- in a hotel-less Holly Springs.

"To have a company like Hilton build a 124-room hotel in what they would consider a secondary market says a lot about our community and our ability to support a hotel of that type," Town Manager Carl Dean said.

One Triangle hotelier has managed to deftly outmaneuver the credit crunch. Concord Hospitality, which late last year sold 20 of its hotels for $440 million, has been able to put that cash toward expanding its portfolio.

The Raleigh company broke ground on two more hotels this month, bringing its construction pipeline to 15 hotels including about 2,150 rooms across the country. Among them: the 229-room Renaissance at North Hills in Raleigh and an 82-room Courtyard by Marriott in Durham.

The hotels in its pipeline are expected to open by the end of 2009, putting Concord on pace to double its portfolio to more than 100 owned and managed hotel within three years.

It took the company 20 years to build its first 50.