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NAPA COUNTY -- A number of forthcoming or proposed hotel expansion projects this year could have the Napa Valley well positioned if  a tepid economic recovery takes full swing in 2013 -- and early indications show signs of business returning to pre-rececssion levels, according to hotel managers and tourism experts. 

Numerous projects are in the works just in the city of Napa,  and another project in St. Helena, the proposed 57-room Grandview Hotel, received tentative approval from the city's Planning Commission last week to add a 40-seat restaurant to the proposal. The City Council will vote on the matter within the next month or so, according to its investment group, Grandview Hotel Investors, LLC.

In the city of Napa, there are 657 rooms, from five separate hotel projects, that are approved and awaiting construction, according to a list provided by the city. Another 84 rooms are pending approval. The southern portion of Napa County near Airport Park is counted separately, where another project, a Montalcino Resort Hotel, has been approved for a 379-room property.

[caption id="attachment_48826" align="alignleft" width="160"] Clay Gregory[/caption]

The projects are further proof that the tourism sector is seeing a sustained turnaround, according to Clay Gregory, chief executive officer of the Napa Valley Destination Council.

"Our growth was robust, and you see major companies investing," Mr. Gregory said. "From a lodging standpoint, we're doing much better than most of the country."

By the end of March, The Meritage Resort and Spa in South Napa will complete a $40 million expansion that consists of an added 131,300 square feet and additional 165 rooms, just about doubling the hotel. 

[caption id="attachment_48828" align="alignright" width="288"] Reynaldo Zertuche[/caption]

Embassy Suites Napa Valley will also wrap up the first phase of an $8.5 million total renovation on its 205-room hotel by the end of March. The first phase of room renovations cost $4 million, and a second, $4.5 million phase -- which will revamp the lobby, add 4,000 square feet of meeting space and add new outdoor furniture and fire pits -- is set to begin in November and be completed by May 2013. The completion date should be ideally timed for when the rebound should be in full gear, General Manager Reynaldo Zertuche said.

"Occupancy levels are as good as before in 2008 and 2007, at least for us," he said. "With the average daily rate, we are close to achieving the ADR in '08 , and in a year or two years, we should be there."

[caption id="attachment_48829" align="alignleft" width="280"] The Embassy Suites Napa Valley is undergoing renovation[/caption]

Embassy Suites is also hoping to move forward on an expansion of 40 to 45 rooms, but financing has not yet been secured, and Mr. Zertuche said the cost and timing are not yet known. The hotel is operated by Hilton Worldwide and owned by Texas-based FelCor Lodging Trust Inc. a publicly traded company.

More projects are in the works and more are likely to be announced in the coming year or so, Mr. Gregory said.

Other notable Napa projects include The Napa River Inn, which is moving forward on a plan to add up to 26 rooms to its 66-room hotel, an expanded spa and other improvements.

Both a St. Regis resort in Carneros and The Ritz Carlton on Silverado Trail could break ground later this year, Mr. Gregory said. Those two projects would be a significant boon, but they have yet to nail down financing. 

According to a report by the City of Napa, the St. Regis project, if completed, could generate approximately $3.9 million in annual transient occupancy tax revenues initially, eventually increasing to roughly $9.8 million after 10 years.  There are only 17 St. Regis resorts in the world, with eight in the U.S.

Likewise, a new Ritz Carlton at First Street and Silvarado Trail could employ a staff of over 500, while generating as much as $6 million in annual tax revenue, according to a city report.

Both the 175-room St. Regis and 351-room Ritz Carlton projects have been approved. Other approved but not yet built projects include a 90-room Soscol Hotel on Soscol Avenue, a 25-room Eliza Yount Mansion Inn on Seminary St, and a 16-room Milliken Inn expansion on Silverado Trail, according to the city of Napa.

The Grandview Hotel project in St. Helena will be the largest hotel in the city. The investor group, which did not provide cost figures, said it hopes for a late summer groundbreaking and possibly completion by the end of 2013. It's 57-room hotel would be built across multiple adjacent properties, including five rooms in the historic Acacia House, and would total just over 38,000 square feet at 1915 Main Street. It would include 3,500 square feet of both meeting space and spas, as well as the 40-seat restaurant. The City Council must first vote to abolish a rarely enforced ordinance that caps the number of food and drinking establishments, and the Planning Commission took the first steps to support that.

Mr. Zertuch of Embassy Suites said that with so many projects in the works, including numerous big-name newcomers,  more established or older properties would likely undergo renovations and expansions, mainly as a means of remaining competitive.

"With all the new hotels, they have been conscious that they need to invest in this property," he said of the hotel ownership, FelCor. "It's an older property but it will have a brand new product. You have to remain competitive. The charm we have is hard to build."

Mr. Gregory, of the Destination Council, said the occupancy rate in the Napa Valley was up 7 percent over the year.