Valhalla Negotiating New Deal for $110M Hotel

TEMPE, AZ-Starwood Hotels & Resorts Worldwide Inc. will not fly its Le Meridien flag at the 41-acre Hayden Ferry Lakeside as previously announced. The $110-million hospitality component of the mixed-use development on Tempe Town Lake will be built in partnership with another high-end brand.

“Starwood’s great, but the timing just didn’t work out with them and this project,” says Tod Decker, president of Scottsdale, AZ-based Valhalla Development Group. “We’re still friends and we still like them. But, we had to pull back from their timeframe in an effort to get ours going.” The 240-key hotel and 24-unit residential units, slated for 80 E. Rio Salado Pkwy., are expected to break ground by December.

Decker tells GlobeSt.com that the contract with the new hospitality company will be signed within the coming weeks, keeping the flag’s identity under wraps until the deal is done. If all goes as planned, the hotel should be operational by spring 2011. “This is still a four-diamond hotel and a perfect fit for the development,” he stresses.

When Hayden Ferry Lakeside broke ground in 2001, plans called for up to 388 condominiums, hotel, retail and office space. Even a couple of years ago when the 183-room Le Meridien was unveiled as the project’s anchor hotel, there were still a high number of condos on the drawing board.

But, Decker says things have changed due to current market and demand for condos. “We ended up changing our program a bit to create more rooms for the hotel and fewer condos,” he says. “The residential side was lowered and we raised the hospitality side.”

The Hayden Ferry Lakeside website does show two condo projects: the 40-unit Edgewater at Hayden Ferry Lakeside and 104-unit Bridgeview at Hayden Ferry Lakeside. Both condo projects have been completed.