Old Town Scottsdale hotel with restaurant, rooftop bar to open in 2026. Everything we know

By Corina Vanek for Arizona Republic

A hotel in Old Town Scottsdale will open early next year, followed about two years later by an apartment project that includes a historic building.

The hotel, which will be an AC Hotel by Marriott, began construction in early 2024 at the site near Scottsdale and Indian School roads. The hotel will include 168 rooms and is planned to complete construction in February 2026, leaders from PEG Companies, the hotel developer, and Okland Construction, the general contractor, said.

The project included demolishing a former Howard Johnson motel that was on the site. Construction has also required relocating and burying overhead powerlines, Bryan Lewallen, general superintendent for Okland, said.

PEG bought the site, which totals about three acres, in 2021 for about $27.5 million, according to real estate database Vizzda.

The hotel will feature a ground-floor restaurant that will likely be tapas-style with shareable plates, Garett Bjorkman, co-CEO of PEG said, adding the lease for the restaurant space has not yet been finalized. The restaurant will face Third Avenue, with indoor and outdoor seating options. The development will also include a public art installation and a pedestrian plaza along Third Avenue adjacent to the hotel.

“Old Town, with the investment in Scottsdale Fashion Square and the entertainment district, made the market a particular focus for us,” Bjorkman said. “There is a lack of supply of this kind of hotel in the market.”

The hotel will also have a rooftop bar with some food options that will be open to the public and a rooftop pool for hotel guests.

In early 2026, construction will start on the apartment portion of the project, which will incorporate the historic “Kimsey” building on the site. The building was designed by Ralph Haver and built in 1962. It will be reused as the apartment’s office, fitness center and community space for classes and events.

The apartment will have about 175 units ranging from one to three bedrooms, Bjorkman said. The building will have multi-story townhome-style rentals along Indian School Road, which will have individual street-level entry.

Bjorkman said the apartments will be “super high-end” with luxury touches such as wine fridges, granite countertops and options such as cleaning services and food delivery to the units.

“We want to bring experience and service-type amenities to multifamily,” he said. “It will take a hospitality-like approach.”

Construction on the apartment building will also take about two years, he said, so all construction on the site is expected to be completed in 2028.