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Construction will begin this month on an 11-story hotel in downtown Tempe, which has witnessed a flurry of development and new business openings in recent months.

The Miami-based Finvarb Group now has a building permit for a Residence Inn by Marriott and could begin work at any time, according to Tempe.

The hotel is a response to the high room occupancy rates in Tempe and a shortage of hotels downtown, said Nancy Hormann, executive director of the Downtown Tempe Community.

“I think there’s a huge demand for more hotel rooms, especially this type of hotel,” Hormann said. “It’s more for extended-stay. With all of our high-tech firms coming into town, it’s a wonderful place to stay for an extended period.”

The hotel is a long time in the making.

Finvarb started working on the project at least as far back as 2006. Plans got sidelined during the recession, and it was delayed again a year ago as the developer worked to secure financing. The DTC had used the future Residence Inn site for a community garden, but it gave up the space a year ago as it anticipated work was imminent.

“We’ve been saying for the longest time we planted a garden and grew a hotel,” Hormann said. “It just took a while to start.”

The 173-room hotel will be built on the southwest corner of Fifth Street and Forest Avenue, where the popular Bandersnatch Pub once stood. It will include some retail space and a rooftop pool.

The Residence Inn is one of several new projects announced recently. Just east of the site, a nearly 300-unit multistory apartment tower called The Hub is under construction. That’s another project that fell victim to the recession, but plans for luxury condos have morphed into housing aimed at Arizona State University students. Also, plans were announced this year for a 10-story office building at Hayden Ferry Lakeside in response to increasing demand for office space in Tempe.

Mill Avenue has added 48 new businesses since 2009, and the vacancy rate has fallen from about 32 percent to about 20 percent.

The Residence Inn reflects a growing level of interest among hotel developers in the downtown, Tempe spokeswoman Kris Baxter-Ging said. Downtown Tempe needs more hotel rooms than this one project will supply, Hormann said.

The area needs a property with a conference center because the one at the Tempe Mission Palms isn’t big enough to satisfy demand, Hormann said.

“It will be great to have these new hotels come in, but it would be especially great if we could have one with a conference center,” Hormann said.

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