The hotel is scheduled to open in summer 2008. Sage Hospitality EVP Ken Geist tells GlobeSt.com the cost to acquire floors six through 16 was $20.5 million. In the past year, the project's total development cost has risen from $108 million to $118 million, he says, due to a combination of factors. "Construction costs, expanded scope, schedule changes, more interest expense, and a lot more legal expanse related to the New Markets Tax Credit," Geist says.

The project won $72.5 million of New Markets Tax Credits--the largest single allocation of federal New Markets Tax Credits in the country--which netted Sage about $23 million in cash. The city's Portland Development Commission also is assisting in the project, providing $14 million through its seismic loan program.

Starwood's high-end brand, the Luxury Collection is new to the market and will compete for room nights with the likes of the Westin, another Starwood brand, and the Heathman. There are currently eight Luxury Collection hotels in the US.