The first new full-service hotel to rise in Monterey, Calif. since the early 1980s is officially under development. In September, San Mateo, Calif.-based hotel owner and operator Pacific Hotel Management announced plans to develop the 208-room Cannery Row Hotel. The hotel will be constructed on a formerly run-down waterfront parcel located in downtown Monterey. It will consist of two, four-story buildings, a 95-seat restaurant and more than 10,000 sq. ft. of banquet and meeting space. Another 20,000 sq. ft. will be devoted to retail space on the ground floor of both buildings.

Buchanan Street Partners, a real estate investment bank based in Newport Beach, Calif., arranged $59 million in financing for the project. Thomas Sherlock, managing partner of Buchanan Street Partners, believes that the new hotel will help revitalize the run-down waterfront area made famous by John Steinbeck in his 1945 novel.

Previous developers failed in their attempts to build on the site due to environmental lawsuits and limited interest in financing the project. Earlier this year, however, Pacific Hotel Management secured development rights through a ground lease. The 2.7-acre parcel is divided up between various parties (including the City of Monterey), which further complicated past efforts. Hotel construction will be completed by fall 2008.