Madras hasn’t seen a new hotel since 1986, but the Madras Redevelopment Commission wanted to ensure that the first one to break ground also would bring the city its first conference center.

Cross Keys LLC, a Prineville-based group headed by Rich and Sandy Priday, plans a four-story, 72-room hotel with an indoor swimming pool and spa, business center, exercise facility and a 5,200-square-foot conference room that can seat 200 people.

The unnamed hotel will cost $5 million, said Cross Keys partner Sandy Priday. Cross Keys will break ground on the site – on U.S. Highway 26 west of Safeway – in late September or early October.

”You’d better believe it’s going to be nice,” she said. ”It’s going to have more of a metropolitan look. It will be something new for the Madras area.”

In exchange for the conference center, the Redevelopment Commission will pay Cross Keys $105,000 annually for five years, or a total of $525,000.

The funding comes from an urban renewal district formed by the city in 2002. The Redevelopment Commission has allocated money for community development and to clean up blighted areas.

Funding is contingent upon Cross Keys building a high-quality hotel and a large conference center, said Mike Morgan, city administrator.

Originally, the Redevelopment Commission made the funds available based upon the developer’s ability to build a hotel that would carry the flag of a major brand, such as Comfort Suites, Holiday Inn or Marriott, Morgan said.

”The developer explained that the conference center would be out of compliance with the flag’s name,” Morgan said. ”They convinced the (Madras Redevelopment Commission) that they’ve succeeded in (the) quality that they wanted without the flagging.”

The Madras Redevelopment Commission dropped the branding requirement last month.

”What we got out of this is much more than the (Madras Redevelopment Commission) had hoped for,” he said. ”We wanted a high-end hotel with amenities and the community is going to see a well-proportioned development.”

The hotel will be part of a 20-acre property owned by Cross Keys, which will later be developed into retail space as well as a residential development on a rim overlooking the Madras area.

”We’re looking at retail, restaurants, office buildings, houses and condos on the rest of the property,” Priday said. ”It’s something we will (consider) in the future.”

Frank Morton, who chairs the Redevelopment Commission and also serves as Madras’ mayor, said the meeting space will fill a missing piece in the city’s development.

Businesses or groups looking for a large meeting space have to travel to Bend, Redmond or Kah-Nee-Ta. In Madras, the only meeting spaces available are too small for large groups, he said.

”It’s worth $500,000 to entice a new motel to Madras,” he said. ”We do not have a large group meeting room anywhere.”

Developers expect to complete the hotel by April or May 2007. Cross Keys managing partners Court Priday, son of Rich and Sandy Priday, and Troy Clark, will manage the hotel.