Dejan Racic, executive director of locally based Delta RealEstate, says a 325-key "real" InterContinental Hotel, withsignature five-star underpinnings, and an office building willjump-start redevelopment of the landmark block. The hotel, whichincludes five levels of underground parking, will be completed in2011. The project's been on the drawing board since May 2007 whenDelta and InterContinental Hotels Group plc inked a management pactfor the new hotel.

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While working the new, Racic says a plan has been firmed up forthe old Hotel Continental, the city's former torchbearer for theUK-based chain. [IMGCAP(2)]Racic tells GlobeSt.com that the415-room hotel will be closed in July 2009, allowing the estimatedEUR 35-million [$55.3-million] facelift to begin immediately afterbookings clear from Universiade sporting games. If all goes asplanned, the hotel will reopen in September 2010, with the firstCrowne Plaza flag going up in the city.

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"This hotel was built in the 1970s and it's relatively modern,"Racic says, "but it needs a massive renovation." The upcoming workincludes mechanicals, suites and amenities to reposition andsharpen its image in the business-driven hotel market.

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Delta's real estate arm, NBGP Properties, acquired the block ofexisting space, including apartments, in April from Genexfor EUR $149 million [$233 million]. Colliers International Serbiacrafted the feasibility study for the redevelopment plan.

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Racic estimates that Delta controls about 60% of the landmarkblock, where it also has its 20,000-sm2 [65,616-sf] headquarters inCongress Center. As Delta digs into the redevelopment, Racic says afor-sale residential component will be added, but it might take 18months before it comes to fruition due to design, zoning andpermitting. Current zoning allows for 40,000 sm2 of residentialspace, which Racic equates to 300 units.

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"This is definitely the largest single development in this areaof the city," Racic says. The bull's eye play is to plant afive-star hotel in the heart of the city, targeting business-traveland regional tourism to corner market share.

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