PHOENIX-Construction has begun on a $180-million, 750-room Westin resort in north Scottsdale that will be the Valley’s second largest when completed in 2003.

The Westin Kierland at Scottsdale Road and Greenway Parkway is being developed by Starwood Hotels and Resorts Worldwide Inc., a New York-based hotel owner and operator, Cook Inlet Region Inc., Woodbine Development Corp. and the Herberger Interests of Phoenix.

Along with 750 rooms in 12 stories, the hotel will feature 60,000 sf of meeting space, a full-service spa and more than 150 time-share units. The new Westin is in the heart of north Scottsdale, with plenty of retail shops and fine dinning nearby. The hotel site is adjacent to 27- hole golf course.

Developers have been trying to get financing for a new resort in the Valley for years, but those efforts were undercut by the glut of limited-service hotels that were built there over the past several years. Those lower-end hotels drove down overall occupancy and room rates, making it difficult for developers to find a lender.The Westin Kierland found financing with Bank of America, Well Fargo Bank and the Bank of Nova Scotia.

There are now two major resort projects under way in north Scottsdale. A $280-million, 950-room Marriott Desert Ridge is under construction a few miles north of the Westin project and should be open just a few months earlier. When completed the resort will be the largest in the Valley, surpassing the 730-room Arizona Biltmore.

Hotel analysts expect that it will take two years for the market to absorb the new rooms that the two resorts will add to the existing supply of 10,000 rooms. The Valley’s luxury resort occupancy rate was 72.2% in the first 10 months of this year, up from 71.5% last year, according to hotel industry consultant Rich Warnick. The average room rate was $248, an increase of $8 over last year.

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