On Feb. 13, the city of Sunnyvale issued demolition permits to allow Millennium Hotels and Resorts to turn the Four Points Sheraton at 1250 Lakeside Drive into a four-star "destination hotel" and condominium complex complete with wedding facilities, a

2,500-square-foot spa and 15,000 square feet of meeting space.

Gary Lind, Four Points' general manager, who is working on the redevelopment from his office next door to the complex, said the project is a milestone for all the involved parties.

For Millennium, a Singapore-based company with hotels around the world, the project is its first completely new construction project in the United States. Before this, Millennium hotels were just upgrades of existing structures.

Lind says it's also part of the "hottest trend," in hotel developments--the pairing of high-class hotel space with for-sale condominiums in one complex.

While the final cost of the project is still unknown because of unforeseen changes and rising material costs, Lind said it will easily surpass $100 million.

The first four-star hotel in Sunnyvale should open around the same time as the new Forum at Sunnyvale Town Center "lifestyle center."

Much like the Forum project, under construction on Mathilda Avenue where the old Town Center Mall stands, the Millennium complex will include 244 condominiums for permanent residents, including 30 below-market-rate units.

And, much like the Town Center Mall redevelopment, Lind said Millennium hopes to begin selling condominiums in late 2007 and open the hotel in early 2008.

Lind said having condominiums for sale helps the hotel because it provides a source of funds to make sure it can complete building at the site.

"You fret over the money that is going to be spent, but we are so confident in the project, in Sunnyvale and in the market, because we've been talking to people about the need for housing and the need for a quality hotel with great facilities," Lind said.

There are no four-star hotels with meeting space and other amenities in Sunnyvale. John Pilger, Sunnyvale communications officer, said if the city is going to remain competitive, it's going to need to develop just that.

"As we potentially get new class A office space--and with the expected resurgence of business and investment--we're going to need hotel infrastructure to support it," Pilger said.

One drawback is that Sunnyvale lacks the social attractions of surrounding cities. Pilger said Sunnyvale does have the advantage of key placement in Silicon Valley and easy freeway access to much of the Peninsula and South Bay.

"We may not have the golf courses, but we've got Sunnyvale, and it's a very central setting in Silicon Valley," Pilger said. "They're building it in Sunnyvale, but they're putting it in Silicon Valley."

For Sunnyvale specifically, it will fill help fill the four-star hotel void. Just as the proposed Jay Paul project will bring needed class-A office space to Moffett Park and help Sunnyvale position itself for a new technology boom, the Millennium Hotel, Silicon Valley will help Sunnyvale host business travelers for those companies.

Pilger said the fact that Millennium has selected a site in Sunnyvale is a good sign.

"It's a reflection of the fact that Sunnyvale remains a well-managed city with a bright future," Pilger said. "The people doing this are professional hotel operators, and they're going to make an investment where they see a return."

Sunnyvale Associate Planner Steve Lynch said there are currently about 3,500 hotel rooms in Sunnyvale. While they are usually full during the week, weekend occupancy is very low. A hotel such as Millennium's would not have that problem because the hotel and its location should be enough of a draw to keep rooms filled throughout the week.

Sunnyvale benefits from filled room because they bring in more money through the recently-increased Transit Occupancy Tax.

"The more we can do to fill hotel rooms will bring in more revenue," Pilger said. "And certainly having a couple hundred rooms that are occupied throughout the week will help."

On the residential side, having 244 condominiums that range from single-bedroom to three bedroom units will ensure a constant stream of patrons for local businesses. The price range will be from around $500,000 to more than $1 million.

Condo residents will also have full access to room service, cleaning crews and other hotel amenities, which Lynch says will appeal to wealthy homeowners looking for a higher quality of life.

Lind says Millennium hopes the lower-priced condos will attract people from all parts of Sunnyvale, including school teachers and public safety officers.

In addition to transit occupancy and property taxes, Pilger said the hotel complex will also help the city by bringing patrons to Sunnyvale stores and restaurants.

Faultline Brewery is one restaurant looking forward to the hotel. Its back patio looks out onto the pond and hotel site. Since the Four Points hotel closed in December, brewery co-owner Mark Perry said his restaurant has seen a drop of approximately 50 customers a night.

Until the hotel opens, he thinks things will be rough.

"I wish they had got the demolition done a little earlier, because weather is starting to get nice, and I think that demolition is going to render our patio null-and-void," he said. "I think that this summer, we'll be hard-pressed to sell events here."

Perry says, however, he doesn't think it will be a fatal decrease in business.

"I think the most difficult time for us was the "dot-bomb," and we made it through that," he says.

He says he expects customers to flow into the restaurant because it is so close to the hotel and the pond.

For Silicon Valley, where open space is often a precious commodity, the complex's pond, open grass space and low height will be a change from the high-rise hotels of downtown San Jose.

"What is absolutely unique about our hotel is that it's so resort-like," Lind said. "It's not a typical high-rise; we've got our lake and our ducks and our trees."

While they won't tower over the surrounding area, the buildings will be taller than their present 30 feet. Both the residential and hotel areas will be 75-feet, seven-story buildings. Lynch said the majority of the building must be done above ground--including parking spaces for more than 600 cars--because in some places the water table is only three feet underground.

"Everyone wanted to go underground with the parking, but it would have been a nightmare," Lynch said.

The buildings are tall because much of the construction's focus is on preserving open space on the site. The pond runs the entire length of the property on the eastern border, and there are trees throughout the lot.

Lind said during demolition and construction, a temporary nursery will be built to house the trees so they can be replanted once the new buildings are in place. Tree preservation was part of a friendly amendment made to the final approval of the project by the Sunnyvale City Council on Sept. 13, 2005.