Aug. 13, 2002 - -- A South Dakota hotel development and management company is scheduled to purchase the Ambassador Hotel in downtown Detroit Aug. 22 and begin converting it to a Holiday Inn Express & Suites. 

The Summit Group of Sioux Falls will spend more than $5 million to renovate the 252-room hotel three blocks from the soon-to-open Compuware Corp. headquarters, Jennifer Larsen, Summit's vice president of finance, said Monday. 

A Holiday Inn Express & Suites will add a renovated hotel with budget prices and a national reservation system to the downtown hotel market. Downtown Detroit has only 2,800 hotel rooms, a small number compared to central business districts in other major cities. 

"It will be the closest hotel property to the new Compuware headquarters," said Mike Blahosky, a hotel expert at C.B. Richard Ellis, a commercial real estate broker in Southfield. 

"It's a well-recognized brand with a good reservation system," he said. "It will add mid-tier rooms to the downtown market, which we don't have a lot of." 

Starting in September, the Summit Group plans to replace the hotel's guest bathrooms and most of the carpet and vinyl tile. 

It will create 48 suites by demolishing walls between adjoining rooms. Twenty-four of the suites will have kitchenettes. It was unknown Monday how many rooms the hotel will have after the renovation. 

The Summit Group also plans to renovate the hotel's lobby and meeting space and replace its windows and heating, ventilation and air conditioning systems, Larsen said. 

The renovated 16-story hotel is expected to open by year's end, with rooms going for $85 to $95 per night. 

"We think that there is a lack of hotel rooms of this kind of class, which is limited service and nice conditions," Larsen said. "These are rooms that will serve families as well as business travelers who aren't traveling first class." 

The hotel at 1020 Washington Blvd. was known as the Best Western until Highgate Holdings, the present owner, changed its name about two months ago. The hotel's rooms now are $79 per night. 

Highgate Holdings of Irving, Texas, also owns the Crowne Plaza Detroit Hotel Pontchartrain across from Cobo Hall. 

The Summit Group declined to reveal the hotel purchase price. Highgate's principal owner, Mahmood Khimji, was unavailable for comment Monday night, his office said. 

The company hopes to do business with Compuware, Larsen said. Compuware has said it will need about 10,000 hotel room stays per year to accommodate business travelers and others. 

The Summit Group owns 45 hotels, primarily in the West and Midwest. The company is owned by Kerry Boekelheide of Sioux Falls. 

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(c) 2002, Detroit Free Press. Distributed by Knight Ridder/Tribune Business News. SXC, CPWR,