A developer is planning a hotel and what would become Tempe's largest conference center even as the lagging economy has slowed or halted many other large projects.

The Marriott hotel is moving forward because Tempe has become such a popular destination for conferences.

In fact, the Tempe Mission Palms has the region's highest occupancy rate because of its location and conference facilities. And event planners have been pleading for more space, city officials said.

Even with economic uncertainty, Tempe expects that the hotel can be built soon and filled because it's so close to Arizona State University, Phoenix Sky Harbor International Airport and the Metro light-rail line.

"That helps the momentum here in Tempe in a way that maybe other cities don't experience," said Chris Salomone, the city's community services director. "Our hotel market here in Tempe seems to continue to be active."

The conference center is just one part of a 1.2 million-square-foot project on the southeast corner of Mill Avenue and Seventh Street.

The development would include a roughly 200-foot-tall hotel in a first phase and two 300-foot-tall condo towers to be built later.

The hotel's additional 240 rooms wouldn't hurt competitors - and would probably help other hotels, Salomone said.

The nearly 52,000 square feet of conference space would draw so many visitors that the Marriott would fill up.

The spillover should boost other hotels' occupancy, Salomone said.

Tempe needs 85,000 to 100,000 square feet of additional conference space, according to a study the city commissioned.

The new center should also draw more events to Tempe because it's about twice the size of the largest conference center in the city.

"What we've been lacking is the ability to get those big groups," said Michael Martin, vice president of the Tempe Convention and Visitors Bureau.

The hotel would occupy the former home of the Long Wong's bar. Las Vegas-based investor Mario Sanchez has spent a decade piecing together several parcels for the development, which will occupy the northern half of a city block. The development is called M7.

An earlier version of M7 called for a major fitness center to anchor the hotel.

But Tempe pushed for the conference center because it will draw more visitors who will spend money at shops and restaurants, said Chris Anaradian, Tempe's development services manager.

A design team has revised plans multiple times and should develop one of downtown's more striking buildings, Anaradian said. "It looks great, and I know it's been worked on for five years," he said.

Marriott is looking to still build the hotel with the fitness component at the location where Harkins Theatres recently closed, at Centerpoint on Mill. However, no specific plans have emerged yet.

The conference center could break ground in about nine months and would take about 18 months to construct.