ESCONDIDO -- City officials said Thursday that a developer plans to break ground this summer on Escondido's first "extended stay" hotel, a four-story Candlewood Suites just west of Interstate 15 that will feature kitchenettes in each of its 76 rooms.

City officials said the new hotel will fill a major void: lodging for business travelers, educators and construction workers on extended assignments in the area.

The hotel is also projected to generate more than $150,000 in annual hotel taxes for the city when occupancy levels reach 75 percent in the fourth or fifth year of operations.

City Councilman Sam Abed, a member of the council's economic development subcommittee, said the developer's decision to move forward with the project in a slumping economy showed that Escondido is doing the right things to attract new businesses.

"What's going on in Escondido during a bad economy is simply amazing," said Abed. "I haven't seen this much activity anywhere else in the county."

Buildings under construction in the city of Escondido include an 11-story public hospital, two upscale office complexes, an elaborate Lexus dealership with a restaurant inside, a large downtown apartment building and a retail complex featuring a gym and pet store.

Work is also under way on four new fire stations and a combined headquarters for the city's fire and police departments.

Construction is also slated to begin this year on two other hotels: a seven-story, 196-room downtown Marriott catering to tourists; and a 105-room Marriott hotel designed for corporate clients on La Terraza Boulevard, which is high above the eastern side of I-15.

City officials said the three new hotels will not compete against one another because they will fill different needs. The number of hotel rooms in Escondido will increase from 967 to 1,344 when all three new hotels are open.

Councilman Dick Daniels, the other member of the council's economic development subcommittee, said the council was careful to prohibit the new hotel from allowing guests to stay longer than 30 days.

One problem with guests staying for more than 30 days is that it makes them exempt from city hotel taxes.

Another problem is the potential for the property to become a makeshift apartment complex. City officials said they have long been frustrated by several such properties on South Escondido Boulevard, where long-term tenants create overcrowding and parking issues but do not pay school fees or other taxes.

"We wanted to make sure the property is developed the way we envisioned," said Daniels. "We didn't want it to be abused."

The Candlewood Suites will be built and operated by Pacifica Properties of San Diego, which operates nine other hotels in the county. One of those hotels is a Holiday Inn Express adjacent to the Candlewood Suites site.

Last year, Pacifica executive Tom Bell told the city that Holiday Inn guests were "constantly requesting kitchenettes."

Bell did not return calls this week about the project, but city planner Bill Martin said Pacifica filed permit applications this month and a plan outlining how the Candlewood Suites and Holiday Inn will share parking. Martin said the developer told him that ground breaking is slated for July.

The 38,800-square-foot hotel will feature 700 square feet of meeting rooms, a fitness facility and an outdoor swimming pool. The architecture will be white and khaki stucco with brown concrete tile over a pitched roof.

The 1.2-acre site is just north of where Valley Parkway intersects Auto Park Way. A Coco's restaurant is just to the south.

The site has been vacant since 2003, when Fogarty's night club was destroyed by fire. The club was known mostly as a singles bar specializing in bands that played 1980s music.

Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.