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ATLANTA-Banking on a sharp improvement in the business travel market over the next five years, White Plains, NY-based Starwood Hotels and Resorts Worldwide plans to develop a 38-story, 225-room hotel and 120-unit condominium community on the site of the 40-year-old, 176-room Lenox Inn in the affluent Buckhead district, eight miles north of Downtown, according to preliminary plans filed with the city.

In December, the city’s zoning review board will consider the developer’s request to change the site’s 1985 zoning plan which calls for a hotel and offices totaling one million sf. If approved, Starwood also plans to add 180 condominium units on the 18 floors atop the hotel’s parking structure. Demolition of the Lenox Inn at 3387 Lenox Rd. NE is under way.

Starwood officials couldn’t be reached by GlobeSt.com’s publication deadline. But area hospitality industry brokers tell GlobeSt.com they estimate the development cost of the venture at $75 million.

The project, tentatively called W. Buckhead Hotels and Residences, would be Starwood’s second W brand property in the metro area. The W Atlanta opened in suburban Dunwoody in 1999. Plans for the Buckhead undertaking call for a 200-seat restaurant, a 33,000-sf spa and health club and a 3,600-sf ballroom. Space for another 350-seat restaurant that could be leased to an independent owner is also in the plans.

When built, the new Starwood venture will be competing directly with a 21-story, 400-room InterContinental Hotel under construction and scheduled to open in November 2004. The Buckhead site is next to the Atlanta Financial Center on Peachtree Road. The developer is InterContinental Hotels Group, parent of Holiday Inn.

The harsh hotel market in the city is seeing owners cutting room rates to a level at least 10% lower than they posted in 2002, local hospitality industry consultants tell GlobeSt.com. The average quoted room rate in Buckhead is about $104 per night.

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