Capri Inc. Will Develop $55M Flagstaff Hotel by 2029
The 143-room project will replace a downtown site, shifting local labor demand and hospitality capacity.
Updated on Oct. 11, 2026 in Hospitality
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Tucson-based Capri Inc. will develop a $55 million hotel project in downtown Flagstaff that is slated for completion in the first quarter of 2029. The development will replace the former 1951 City Hall building at the corner of Beaver Street and Birch Avenue.
Why it matters
This project aims to leverage Flagstaff's combination of university demand, historic downtown activity, and outdoor tourism to capture market share. It will add 143 rooms to the existing citywide base of 5,500 units, increasing competition and labor competition for local hospitality operators.
The project represents a $55 million investment and will create 70 to 90 new jobs in the Flagstaff area. It is set to add 143 guest rooms to the market, expanding the total supply currently estimated at 5,500 hotel rooms.
The players
Capri Inc.
A Tucson-based developer and hotel owner currently managing a portfolio of six properties.
Wespac Construction
A Phoenix-based general contractor specializing in commercial development and building infrastructure.
JRA Architect
An architecture firm led by Dale Johnson tasked with the design of the hotel and parking complex.
The details
The development will include a five-story hotel structure paired with a four-and-a-half level parking garage at the intersection of Beaver Street and Birch Avenue. Construction is slated to proceed in stages, starting with the garage in September 2026 before hotel work begins in 2027. This multi-year build-out reflects typical urban infill constraints, with Wespac Construction serving as the general contractor.
Timeline
Construction of the parking garage is expected to start at the end of September 2026.
Hotel construction is targeted to begin in Spring 2027.
The hotel is slated to open in the first quarter of 2029.
Market Landscape
This project follows a pattern of repurposing legacy civic infrastructure for private hospitality use in high-tourism, university-adjacent markets. It signals ongoing investor confidence in the growth of Flagstaff as a year-round destination for both institutional and leisure travel.
Local hospitality operators should anticipate increased competition for service-sector labor as the project begins its hiring phase for 70 to 90 positions. Existing businesses in the vicinity should also monitor the planned start of garage construction in late 2026 for potential impacts on downtown foot traffic and logistics.
The takeaway
Large-scale hotel developments often shift local labor markets and downtown traffic patterns years before opening. Operators should begin evaluating their staffing retention strategies well in advance of the 2029 completion date to mitigate the impact of new capacity entering the local market.
Further reading
For broader trends impacting regional lodging supply, see Hospitality.
Source note: This article includes information reported by Flagstaff Business & Online News | Northern Arizona Local Newspaper.
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