The major stumbling block was the financial crises that befellAtlanta-based Homestead Village in mid-1998. Those woes occurredjust as Wall Street's appetite for hotel investment was waning,making it difficult for Homestead to find someone to take over theventure.

"It had 100% to do with the debt and equity markets," says PaulPalandjian, whose Intercontinental Cos. purchased the developmentrights last November, and is now pushing ahead with the 190-roomstructure. "There weren't many banks who would look to do a newhotel project, even though Boston is one of the strongest hotelmarkets in the country."

With Suffolk Construction serving as general contractor,Intercontinental has begun site work on the property, the longtimehome of Dini's seafood restaurant. The company is financing itthrough a private opportunity fund that has previously been used toacquire office properties, although Intercontinental also boughtanother nearby Boston building, One Court Square, that it willrenovate from office use into a boutique hotel.