Bellingham already has several hotels with quality rooms and conference facilities, but the developer selected to build a new Holiday Inn next door to the Bellingham International Airport thinks there is room for more.

“There is still a need and I think that need will be met within this facility,” Dan Mitzel, chairman and managing member of Hotel Services Group LLC, a Mount Vernon-based company, said. “I think that the bar is being raised in the quality of rooms in the Bellingham market, and we want to raise it even further.”

The Holiday Inn proposal is moving ahead after the Port of Bellingham Commission voted, 2-1, in early April to approve a preliminary letter of intent from the project’s developer.

Hotel Services Group plans to build the hotel on about 3.77 acres of port-owned property on Mitchell Way, just south of the Pacific Cataract Laser Institute and across the street from the airport’s commercial terminal. The 156-room hotel will include a full restaurant with its own separate entrance, an indoor pool, underground and surface parking, as well as about 7,000 square feet of conference rooms and meeting space, which will range from smaller board rooms up to a full-scale ballroom capable of hosting larger events, Mitzel said.

The construction cost will be about $18.5 million. Once operational, the hotel and connected restaurant could employ up to 100 people, according to Shirley McFearin, the port’s real estate director.

Commissioner Michael McAuley cast the dissenting vote on the proposal’s approval. McAuley said he supported the hotel development, but just not at the site that was chosen as its future location. He said he would prefer to leave the currently vacant land on the east side of Mitchell Way empty to serve as a “visual buffer” between the airport and the freeway, in part to help minimize negative impacts of the airport’s recent growth that has been reported by some residents who live in nearby neighborhoods.

Yet the location was a deciding factor for Hotel Services Group, Mitzel said. The property will allow hotel guests to walk directly to the airport’s terminal instead of having to take a shuttle, as is the case with many other airport-adjacent hotels, he added.

The site also allows for good visibility from southbound traffic on Interstate 5, Mitzel said.

Both Ken Oplinger, president of the Bellingham/Whatcom Chamber of Commerce and Industry, and Loni Rahm, president and CEO of Bellingham Whatcom County Tourism, spoke during the public comment portion of the April 2 meeting and urged the port commission to approve the plan, saying the Holiday Inn would bring tremendous benefits to local business and tourism.

“The airport is a very strong economic engine for the community,” Oplinger said. “I think this is another great piece to that.”

Now that the letter of intent has been approved, the port and Hotel Services Group will determine the final leasing terms for the development. The port commission is expected to vote on a final agreement in early June.

The port has been in search of a hotel developer for the Mitchell Way site since last fall. After sending out a “request for qualifications and vision,” the agency said it received four written proposals from national-brand affiliated hotels.

In addition to the proposal from Hotel Services Group, Shirley McFearin said proposals were also submitted by Erck Hotels Corp. of Missoula, Montana, for a Hilton Garden Inn, a local developer represented by Dave Ebenal for a Cambria Suites hotel, and a company called Architecturally Distinct Solutions of Kelowna, British Columbia, for a Wyndham-brand Wingate Hotel.

A selection team reviewed the four proposals and interviewed the respondents before selecting Hotel Services Group, which currently operates eight national-brand hotels in western Washington, including InterContinental Hotels Group, Hilton and Best Western.

Port Commission President Jim Jorgensen supported the proposed location for the planned Holiday Inn.

“I’m excited about the location along the freeway,” Jorgensen said. I think it’s good exposure for the airport and the hotel.”

Commissioner Scott Walker said he thought that Hotel Services Group’s plan to include underground parking in its development set it apart from the other proposals.

Mitzel said the new Holiday Inn will likely include some type of “stay-and-park” service, where hotel guests can park their cars for extended stays prior to flying out of the airport.

Al Reingold, the corporate director of brand management for Holiday Inn Brands, said the high volume of leisure passengers at the Bellingham International Airport makes the site a prime location for a Holiday Inn.

Reingold added that he expects the new hotel will have a high volume of Canadian guests. The significant increase in passenger levels at the Bellingham airport since 2004 has been fueled largely by Canadians.

Ed Shaw, a regional director for InterContinental Hotels Group, said his company has wanted to build a Holiday Inn in Bellingham for several years. Bellingham already has a Holiday Inn Express, one of 11 brands InterContinental manages, currently located on Meridian Street.

He added that among the company’s various markets, hotels adjacent to airports consistently outperform those in other locations.

As the hotel development plan moves forward, a $38 million renovation and expansion on the commercial terminal at the Bellingham International Airport continues. An expanded baggage claim area and a new baggage carrousel are expected to open before summer begins.

Hotel Services Group will be responsible for completing all improvements at the hotel site, including surface and sub-surface parking, at its own expense. Construction at the site would start by May 2014 and improvements would need to be completed within 18 months, according to the agreement.

The agreement also states that the hotel’s final design must be approved by the port prior to any construction.

Evan Marczynski, lead reporter for The Bellingham Business Journal, can be reached at 360-647-8805, Ext. 5052, or evan@bbjtoday.com.