10-story hotel will replace Dunkley Music

Say good bye to Dunkley Music at its Capitol Boulevard and Broad Street location, where it has been since 1961.  Dunkley will be leaving downtown to make way for a 160-to-190-room extended-stay hotel.

A deal between hotel developer Jared S. Smith and second-generation Dunkley owner Mark Dunkley secured the music store property for Smith. A second deal got Smith the neighboring Winther property. Sales prices were not disclosed. Smith said the properties went under contract Feb. 27.

Mark Dunkley said the store owners had been thinking of moving their store to the west end of Boise for a couple of years. But the owners did repaint the Dunkley building just six months ago.

Mark’s father, William K. Dunkley, started Dunkley in March 1950. He bought the north part of the existing building in 1961 and acquired the southern part from Royal Crown Cola in 1974.

Mark Dunkley said the corner location across from Trader Joe’s has long been attractive to developers.

“I get calls once a month,” Dunkley said. “Jared came with the most viable product for the property that I felt good about. I think Jared is the right man for the project.”

Three years ago the Greater Boise Auditorium District eyed the Dunkley site for a new convention center, but GBAD eventually committed to expanding the Boise Centre at Grove Plaza as part of the Gardner Company City Center project. Dunkley at that time said he had no plans to sell his store unless GBAD paid him enough to move to a good new location.

Smith intends to build a branded 10-story hotel with studios, one-bedroom and two-bedroom extended stay rooms with kitchenettes in each room. The projected cost exceeds $20 million, he said.

“I can’t tell you what (chain) it is, but we predominantly do Marriotts,” said Smith, principal at Pennbridge Lodging, an Eagle-based hotel development and operating firm. “This will be only the second branded hotel downtown (in the core).”

Smith’s hotel will be directly across Capitol from the other branded hotel, the Hampton Inn & Suites. It will sit on 37,000 square feet, about .85 acre. He said he hoped for construction to start as soon as he had permits from the city, in about six months, and expected construction to take 12 to 14 months. He hopes to open the hotel at the end of 2016.

Smith and Thomas W. Lewis started Pennbridge Lodging and Pennbridge Capital in 2005 and now own and operate six hotels in Twin Falls, near Salt Lake City, in Orem and in Gunnison, Colo. They also own what was Intercontinental Hotels’ first Hotel Indigo hotel, in Atlanta, but Intercontinental operates that property.

They built all but two hotels. The Boise hotel will be their largest yet.

“We plan to own and operate this for decades,” Smith said.

Smith was born and raised in Meridian, went away for 16 years to study at Wharton School at the University of Pennsylvania (hence the Pennbridge name) and do graduate work in real estate development at the Massachusetts Institute of Technology. He worked at Starwood Capital, a private investment firm, once a major investor in Starwood Hotels & Resorts, before launching Pennbridge.

Smith returned to Boise four years ago.

The last large hotels built downtown were the Hampton Inn & Suites in 2007 and the Grove Hotel in 1997, all along Capitol Boulevard. Pennbridge’s hotel will also be along Capitol. That’s what convention visitors are looking for, said Carrie Westergard, executive director of the Boise Convention & Visitors Bureau.

“We can go after larger conventions if we have an additional hotel, especially a branded one,” she said.

Smith is also looking toward the north end of Capitol Boulevard.

“A lot of the Legislature might stay here when they are in session,” Smith said. He added that the downtown market lacks extended-stay options.

“There is a real need downtown,” he said. “There is a lack of downtown hotels. We feel very comfortable with this.”