Thursday, November 18, 1999 Older Editions

Rooms for rent: Hotel developers swarm to Andover

By Rebecca Lipchitz

While it may not be true just yet, it seems that one day, anywhere there is an office park in the Andover area, there will also be hotels.

The corporate culture taking over the industrially zoned area of River Road in Andover has led to the potential for five new hotels.

To date one of three proposed hotels approved by local officials is under construction.

Hawthorn Suites, a facility with 84 suites that include small kitchen areas, is designed for the corporate traveler planning to stay in the area from four nights to two weeks.

"From our perspective, Hawthorn Suites is the type of product that is missing from the Andover area," says Terence Flahive, president of Princeton Properties, which runs Hawthorn Suites and other properties.

Already operating in the River Road area are the Wyndham Hotel (formerly the Marriot), a "full-service" hotel with 293 rooms plus bars and restaurants; the Andover Courtyard (also formerly the Marriott), with 146 rooms; and the Tage Inn with 181 rooms; the three collectively offer 620 rooms.

The three proposed hotels eligible to begin construction are all "limited-use/extended-stay" hotels designed for business travelers. They won't have restaurants or bars (which are not allowed in the industrial zones of the River Road area), but have suite-like rooms with desks, kitchenettes, meeting areas and wiring for Internet.

Hawthorn Suites, which opened a branch in Chelmsford in April, is expected to open in Andover in February 2000 at 4 Riverside Drive, in back of Doyle Lumber.

The town approved a similar hotel project for 126 rooms originally proposed as Microtel. According to developer Steve Stapinski, of Andover, owner of Merrimack Engineering Services and head of the local Chamber of Commerce, the project may be built under another name, but its size and scope would not change.

Also permitted to begin construction is Staybridge Suites slated for Technology Drive (off River Road).

Staybridge Suites was originally proposed as a Summerfield Suites hotel of 133 rooms. The project changed hands, but will still be developed by Boston Properties.

In additions, two new projects for the River Road area have been proposed to planners, a Spring Hill hotel, and a Residence Inn.

Andover Planning Director Steve Colyer says even more projects are lining up, waiting for others to fail so they can pick up where the last one left off.

Meanwhile office parks in Tewksbury are spawning the same type of structures. Tewksbury planner Sean Sullivan says a Days Inn is proposed for the area near East Street and Dascomb Road, and a hotel proposal from Extended Stay America in the Ames Pond corporate area is pending before the Tewksbury Conservation Commission.

"It further shows that our location off the interstate is a valuable asset to the town," Sullivan says.

However, it is not at all certain that all those proposals will get off the drawing board.

Rachel Roginsky, principal of Pinnacle Advisory Group of Boston, a firm that conducts studies for developers proposing hotels, cautions that just because a developer has obtained permits for construction doesn't mean it has the money to build.

"As a national rule, the hotel industry is over-built. It's very difficult to get funding to build a hotel except from (local) banks," she says.

Building anything in the Northeast is also a challenge, Roginsky says, due to high land and construction costs, and a permit approval process that can last two to three years.

Her company is hired to research hotel proposals across the country, she says, and often must report to developers that a project should not go forward.

But not in every case. Pinnacle advised Princeton Properties last year to go forward with the Hawthorn Suites project now under construction, Roginsky says.

But the company's analysis is a combination of information about supply and demand in the area, and projections about a market that is not really predictable.

"Nobody foresaw the downturn in the economy in 1991, and now were operating at the opposite end of the spectrum. It's projection, and you have to work with the data you have. We can tell you to build a McDonald's on the corner, but that doesn't mean someone won't build a Burger King across the street," she says.

Flahive says that considering the number of proposals on the table today, he would think twice about developing a hotel today, despite the fact that even similar projects, like Microtel, would serve similar, but less upscale, clientele to Hawthorn Suites. Construction of Hawthorn Suites is tagged at $7.6 million, according to Princeton Properties.

"The bigger question is 'How many rooms can the market handle?' We're looking at ourselves specifically as a greater-Andover area hotel servicing a 10-mile radius," Flahive says.

Colyer says he doesn't see activity in the River Road area dying down anytime soon. If anything, it's just the beginning of economic development in the industrial neighborhood he once called "a sleeping giant."

"There's still room out there. It's like an economic gold mine," Colyer says.

The area is ripe for development due to forethought of planners 40 years ago who asked the town to zone the area industrial when routes 93 and 495 came to town. Highways combined with infrastructure like sewer lines means that it is unlikely the area will quiet down.

"Even after build out it could still be vibrant. It's probably never going to be static, there's so much going on out there," Colyer says.

The combination of businesses in the area, including manufacturers and research and development operations "sort of established its own equilibrium," Colyer says. He expects that the area to keep a balance of industrial equipment and employees without getting "people-heavy."

Residents in who live near the industrially zoned areas argue that the area is already people-heavy, particularly people with cars.

While traffic on the two-lane River Road once backed up into Lawrence 15 years ago, the road is now under construction to be expanded to six lanes in some areas.

But planners agree that hotels give more to towns than they take.

"The benefits are substantial, and since they are adjacent to the highways, they usually have limited impact on daily life," says Sullivan.

In addition to property taxes, hotels pay the town a 3-percent room tax per occupied room.

Andover is also home to the Andover Inn at Phillips Academy and the Ramada Rolling Green on Lowell Street.