Hawkeye Hotels Inc. has picked up where a Michigan-based developer left off and plans to construct a 128-room Hampton Inn and Suites by Hilton on the west bank of the Des Moines River.

Operating as Waterfront Lodging Inc., Burlington-based Hawkeye Hotels said it has a purchase agreement with Riverfront Associates LP, an ownership group managed by Frank Levy of Newbury Management Co., to acquire three parcels at 101 and 121 S.W. Second St. and 114 Water St.

Hundreds of new hotel rooms are being planned in Greater Des Moines as the economy recovers and developers work to acquire commercial land on which to construct nationally branded lodging facilities.

On Feb. 9, John McRoberts, who owns three properties across the street and to the west of the proposed hotel, began overseeing the demolition of the nearly 125-year-old Des Moines Iron & Supply Co. building at 123 S.W. Third St.

McRoberts, who in April 2010 purchased that property for $450,000, said the building was in deplorable condition and needed to be razed. In 1993 and 2008, he acquired properties at 103 S.W. Third St. and 100 S.W. Second St. and is now trying to negotiate the purchase of 112 S.W. Second St.

The property owner recently tapped Simonson & Associates Architects LLC to draft preliminary plans for a phased development, which will likely include a mix of market-rate housing, senior housing and a hotel. He said he intends to submit drawings to the city of Des Moines, and ask for initial reactions, within 30 to 60 days.

Hawkeye Hotels had hoped to erect a four-story hotel on its proposed site, but recent talks with the city about potential flooding in and around the Court Avenue area prompted the project architect, Memphis-based LLW Architects Inc., to draw up new plans.

“Due to kind of these flood issues, we are probably going to have to take it up to five stories,” said Ravi Patel, senior vice president of Hawkeye Hotels. He said that the change, which would allow some mechanical systems to be located above ground level, may also include the addition of more concrete or steel construction materials. According to an artist’s rendering, the building will front Water and Market streets.

The developer intends to finance the estimated $12 million project with a construction loan and a number of incentives provided through a development agreement with the city of Des Moines.

“We think that would be a benefit to the area,” said Rita Conner, an economic development coordinator with the city, referring to the proposed project. “We are trying to look closely at the product and the area and any other variables. We think it is consistent with any ongoing redevelopment and improvement in that area.”

In late 2009, HRC Hotels LLC, citing what it considered unreasonable expectations by the city for an archeological survey, withdrew plans to develop an 80,000-square-foot hotel on Hawkeye Hotel’s proposed site. Levy said an archeological survey was conducted in August 2010, and nothing was found that would deter development.

“We are just making our entry into downtown Des Moines,” Patel said. “In the next three years, we will probably do four or five projects in the Des Moines metropolitan area.”

McRoberts said he is open to suggestions and would entertain other big ideas for the development of his site. “You’ve just got to be really flexible in this economy and leave all of your options open,” he said. “It’s easier to build out in sections as demand goes up than to have it be empty for four or five years.”

Hotel room occupancies in the metropolitan area were up 4.7 percentage points to 58.3 percent in 2010 from the prior year, according to data compiled for the Greater Des Moines Convention and Visitors Bureau (GDMCVB) by Smith Travel Research Inc.

The ability to fill additional rooms will depend largely on population growth and corporate expansion.

“A lot is going to depend on overall growth of the community and business growth,” said Greg Edwards, president of the GDMCVB. “Banking and financial institutions are still being very cautious on lending money to hotel projects.”

As of Dec. 31, 2010, there were a total of 9,962 hotel rooms in Altoona, Ankeny, Clive, Des Moines, Grimes, Johnston, Pleasant Hill, Urbandale, West Des Moines and Windsor Heights.

During its fiscal year ended June 30, 2009, the GDMCVB recorded that a total of 352,715 hotel room-nights were booked in those cities, creating an economic impact of more than $96.5 million. Last year, the number of hotel stays grew to 358,870, the economic impact of which exceeded $105.6 million.

Patel said that in addition to the sales taxes and property taxes that the proposed Hampton Inn and Suites would generate, about 200 construction jobs and 35 to 40 long-term hotel positions would be created. “Over the next 20 years, it’s going to have an economic impact of about $200 million,” he said.

At least five hotel projects have been proposed or are under construction in Greater Des Moines, including an approximately $33 million hotel that will adjoin the Meadows Events and Conference Center at Prairie Meadows Racetrack and Casino in Altoona.

On the southwestern edge of downtown, South Dakota-based Quest Development & Construction Inc. plans to purchase a 4.59-acre parcel and develop two hotels – nearly 200 rooms – at 320 S.W. Ninth St.

In Urbandale, a 90-room Holiday Inn Express Hotel & Suites is being developed in the 8700 block of Plum Drive. It is expected to open in May.

Citing Smith Travel Research, the GDMCVB said that Hyatt Place Des Moines/Downtown, a 93-room hotel that opened in December in the Liberty Building at 418 Sixth Ave., was the first hotel to open in the region since the Courtyard by Marriott West Des Moines at Jordan Creek in November 2008.