Santa Clarita seeing major hotel construction activity; demand seen despite Magic Mountain uncertainty.

A flurry of hotel construction is underway near Magic Mountain in Santa Clarita amid uncertainty about the future of the theme park.

City officials and hoteliers point to high occupancy rates and demand from business customers as indicators that there is a need for more hotels in the area even without business from Magic Mountain tourists.

Well over 200 rooms are under construction near the park and are slated to come online over the next year.

New York-based Six Flags is considering closing the park as the company re-brands itself as a family-friendly chain. Six Flags officials say Magic Mountain, which features a dozen thrill rides and roller coasters, will not fit into its new business strategy. The company is considering selling the park to another theme park operator or other buyers which could result in the site being developed for residential use.

Near Interstate 5 and the Newhall Ranch Road exit, Valencia-based Ocean Park Hotels is building a 140-room Courtyard by Marriott expected to open by early next year, said company President James Flagg.

Ocean Park earlier this year built a 112-room La Quinta Inn & Suites in Stevenson Ranch and a nearby Holiday Inn Express in 2003.

On an adjacent parcel, the Palm Beach, Fla.-based hotel real estate investment mast Innkeepers USA is building a 157-room Embassy Suites slated to open next summer.

Jason Crawford, an administrator in the economic development office of Santa Clarita, said that even if Magic Mountain does close, hotel rooms in the Santa Clarita Valley are already in high demand by business travelers and out-of-town guests.

"There are so many businesses in the industrial center here that utilize the hotels for employees that are coming in for meetings or visitors," he said. "There's a good market for more rooms and more conference space."

He also pointed to sky-high occupancy rates in Santa Clarita, which has just 11 hotels and sits along a busy highway.

But Innkeepers CEO Jeffrey H. Fisher, whose company has 70 hotels mostly in Florida, Illinois and Washington state said closure of Magic Mountain would be a major blow to his new hotel. He said he was unaware of Six Flags' decision to sell the theme park.

Fisher said that along with the area's strong hotel occupancy numbers, Magic Mountain was a major reason his company decided to expand in the area. The company paid $3.7 million for the parcel in 2004.

"We look at the success in any hotel market and we saw a great opportunity there. It felt like it was good growth in the area," he said. "If (Magic Mountain) closes, it wouldn't be good."

The average occupancy rate for rooms in the area in May was 87.22 percent, the highest in the county and far ahead of the county average of 79.16 percent, according to the hotel trend tracking firm PKF Consulting.

BY CHRIS COATES Staff Reporter