"Being in downtown Phoenix with a convention hotel with the amount of meeting space this property will have as well as its proximity to the new convention center allows us to truly bring in the association business," Rick Suhl, vice president of operations for the southwest region of Starwood Hotels & Resorts, tells GlobeSt.com. "Right now we do not have the magnitude of meeting space to handle any of that business."

Ground is not expected to break until mid-2005 on an estimated 100,000-sf hotel at the corner of Van Buren and Third streets. The city began negotiating with hotel chains late last year to operate a luxury facility that would complement the convention center's $600-million expansion, which is underway. The effort will more than triple the downtown's meeting space to more than 900,000 sf by mid-2009.

The hotel cost and general contractor have not been decided although city officials hope to devise a plan that would enable Phoenix to pay for construction with project-financed revenue bonds issued through a non-profit agency linked to the city. Hotel revenue conceivably would be used to pay back the bond debt.