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Nearly three years after it was first approved, a $50-million hotel project is finally underway in the Downtown area. Located across from the Boston Common, the parcel has always been considered prime for a hotel use, but a series of events have conspired to keep it on the drawing boards to date.

The major stumbling block was the financial crises that befell Atlanta-based Homestead Village in mid-1998. Those woes occurred just as Wall Street’s appetite for hotel investment was waning, making it difficult for Homestead to find someone to take over the venture.

“It had 100% to do with the debt and equity markets,” says Paul Palandjian, whose Intercontinental Cos. purchased the development rights last November, and is now pushing ahead with the 190-room structure. “There weren’t many banks who would look to do a new hotel project, even though Boston is one of the strongest hotel markets in the country.”

With Suffolk Construction serving as general contractor, Intercontinental has begun site work on the property, the longtime home of Dini’s seafood restaurant. The company is financing it through a private opportunity fund that has previously been used to acquire office properties, although Intercontinental also bought another nearby Boston building, One Court Square, that it will renovate from office use into a boutique hotel.

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