NORTH WINDHAM – Two hotel developers have their sights set on North Windham.

The first project, a MainStay Suites to be sited on 7 acres across from Seacoast Fun Park on Route 302, would be owned and operated by Erik Heyland, of Wells-based Heyland Development.

Heyland, who owns a MicroTel extended-stay hotel in York, is looking to build a 50-room extended-stay hotel in Windham. He would be approved for up to 74 rooms, each of which would include kitchenettes.

MainStay, a subdivision of Choice Hotels, would stand three stories tall, and include an indoor pool and a small meeting room. Heyland is looking to start building in the spring with completion by late 2013.

With last week’s receipt of a final sketch plan and Department of Environmental Protection approval, the Windham Planning Board has scheduled a final public hearing on the project for 7 p.m. on Monday, Dec. 17, at the Windham Town Hall.

Heyland would be first in the potentially lucrative North Windham market, but a second hotel is already in the works. North Windham business owner Martin Lippman is working with Windham-based project manager Fred Panico to bring a brand-name hotel to property Lippman owns near Sherwin Williams on Route 302. Lippman has submitted a sketch plan to the town, but he is still taking offers from various hotel chains, although he said Hampton Inn has expressed interest.

Lippman, who summers in Standish, has been in the Windham news in recent years by donating $405,000 to the town for the purchase of 123 acres around Chaffin Pond in North Windham. In exchange, he received sewer density rights to 10 of the donated acres.

Lippman said he is looking to build the hotel on three parcels spanning 8 acres along Route 302 adjacent to the town-owned Chaffin Pond property. His project would erect a 70- to 80-room brand-name hotel and include a freestanding, brew pub-style chain restaurant and possibly a freestanding CVS pharmacy if he can lure CVS from the Shaw’s Plaza.

Lippman, contacted at his winter home in New Mexico last week, said he has extensive experience in the hotel and restaurant business. He leases land to several restaurant chains on 10 properties he owns in Missouri, Texas and Oklahoma. Besides leasing to restaurants, he used to manage an 80-room hotel with his wife in the 1960s. Lippman said he is unsure whether he would sell the property outright to a hotelier or lease the properties, which are now home to a hearing aid maker and an indoor garden supply shop, as well as empty lot with a garage fronting Route 302.

Although neither developer would disclose cost estimates, Heyland had Planning Board approval in 2007 and even posted a sign saying a new hotel was coming soon but those plans gave way with the 2008 economic downturn. Both developers, however, believe Windham can easily support more lodging space.

“There’s enough leisure traffic up there particularly in the high season in both the winter peak and the summer peak to drive the business,” Heyland said. “And there’s a shoulder season that we think is there as well in the fall.”

Heyland said the area’s business clientele could help fill rooms in the off-season.

“There is a significant business community in Windham and around Windham and really to get to your closest hotel, not motel, would be back in Portland, which is over 20 miles away. So Windham is its own area and has its own population that would support this hotel,” Heyland said.

Lippman agrees, saying a few upscale hotels could draw new people to the area.

“I believe in that old adage from the movie, ‘If you build it, they will come.’ Windham needs one,” Lippman said. “Yeah, we do have a lot of motels, but they’re the smaller, older motels and a lot of the people stay there because that’s all there is. But if they had a choice like everything else, not everyone wants to go into one of these big-box hotels, but then again a lot of them do.”

Area motel owners are split on their reaction to the likelihood of brand-name competitors.

While Robin Wescott, owner of the Windham Way Motel on Route 302 near the Windham-Raymond line, declined to comment on the proposals making their way through the Planning Board, Peter Gionis, owner of the Northeastern Motel situated just below the rotary on Route 302, doesn’t worry for his future. Rather, he thinks the big hotels are making a mistake.

“That’s stupid, I can survive, but they are not going to make it. Period. There’s nobody around here. This is ridiculous. No one. That’s stupid to spend a few million dollars for nothing,” Gionis said referring to the lack of customers in the winter, fall and spring.

Mark Libby, owner of the White Pines Motel on Route 302 in Raymond, is more worried for his own future. He bought the motel in 2007, right before the crash, and said he relies on income earned in the busy summer months to get him through the winter and spring.

“It will be a death blow,” Libby said. “In the winter, we sit here and watch the money go away. We heat the place and hope that we get business.”

Libby said the idea that the hotels would create more interest in the area – which would bring trickle-down business to the smaller motels – is mostly a pipe dream.

“There’s something to be said for that, but I do believe it’s going to affect our business,” Libby said. “Right now, I think if you spoke with any of the other innkeepers, I believe everyone is running reduced or zero inventory right now. I believe the business is just not there especially from November through June, with the exception of the ice fishing derby. And that’s hit or miss.”

Tom Noonan, a local real estate broker who is working with Lippman, said the competition brought by the new hotels would be good for Windham.

“I’ve been aware of four market studies in the last 10 years and every one of them has shown that there is a need for more lodging,” Noonan said. “If it’s too many rooms, what will happen is the best product will win. That’s what the free marketplace does.”

Tom Bartell, Windham’s economic development director, said State Planning Office numbers bear out the need for more lodging in Windham. In 2010, Windham achieved $224 million in overall sales. Only 1.5 percent, or about $332,000, came from lodging. Other towns that surround Sebago Lake, in comparison, did $17.5 million worth of lodging sales in 2010.

“So you can see that even of all the areas that Windham dominates in retail sales, the town of Windham is clearly lacking in accommodations,” Bartell said. “We have some attractions that would bring people to Windham and the surrounding areas, but not having any hotels makes it difficult for people to come. So I think both projects are positive and really good news for Windham and the area.”

Heyland said he’s not concerned about a potential lack of business, and that smaller motels may be part of a “dying breed,” especially since they are not as easily found on websites such as Expedia and Orbitz that do most of their business with chains.

“We’ve had feasibility studies done, and the market proves out to support this hotel so I’m not worried about that,” Heyland said, calling his development a “a brand new, first-class hotel.”

“It will be something that is widely published on the Internet through search engines and Choice reservations,” he said. “I think the smaller places don’t have that kind of appeal. In a way I think the motels might be a little of a dying breed.”

Bartell and Noonan believe there may be room for both types of lodging.

“When Walmart came into North Windham, everyone was like, oh my God, it’s going to drive the small guy out of business. And it drove out some people with duplication of services, but that’s what competition is,” Noonan said. “However, Walmart was a magnet to Windham. The retail sales in Windham are much higher since Walmart came in. So just let the market take care of itself.”

Bartell sees the issue similarly to Lippman, who believes more people will come to know Windham as a desirable travel destination if a variety of lodging is available.

“This will actually bring additional people in – tourists, business folks, others,” Bartell said. “There are different kinds of travelers. Some of them want a smaller place, stop in and grab a place, or they want a smaller niche-type of accommodations. Others want to know they are going into a branded hotel with all the conveniences of the other branded hotels they’ve gone to. Smaller motels can still compete because it’s a different type of lodging.”

MainStay Suites, an extended-stay hotel that is making its way through the Windham Planning Board process, will likely break ground in North Windham in 2013. It is one of two chain hotels that may soon call Windham home.   

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