ELLENSBURG — Initial work has started on a planned $60 million project in Ellensburg that would include two hotels, an indoor water park, restaurants and boutique retailers.

Gene Martin, who once owned the Ellensburg Inn, plans to have the project completed by the end of 2010, said Ron Cridlebaugh, executive director of the Economic Development Group of Kittitas County. The project would provide hundreds of jobs upon completion and serve as a tourist draw for Ellensburg, Cridlebaugh said.

"This is huge," he said. "If you start looking at the size of it, the hotels and the number of rooms. Employment -- it's huge."

The development, called Lakeside Landing, is planned for north of Interstate 90 and south of Umptanum Road near Ellensburg's I-90 interchange and Canyon Road.

Martin still needs to get building permits, something that could be done as early as late summer, Cridlebaugh said. But he's already gotten approval from the city to build streets and hook up to utilities. That work is going on now.

"It appears at this point to be more than just a pipe dream," City Manager Ted Barkley said.

The Economic Development Group worked with Martin to get the 46-acre development site annexed into the city and rezoned from residential to "tourist commercial" more than a year ago.

Financing for the project itself has come from private lenders, and Martin has agreements with hotel companies and restaurants to become the cornerstone tenants, said Cridlebaugh, who said Martin has not announced who those tenants will be yet.

The planned 45,000-square-foot water park, which does not have a name yet, would connect to one of the hotels via skybridge and feature a "lazy river" and four-story water-slide.

"It will have multiple slides, a beach area, a tidal pool," Cridlebaugh said.

He acknowledged the trouble large developments have had in this economy, even when financing has seemed secure. But at this point, he's confident the project will get built.

Martin, who did not return a call Friday seeking comment for this story, had previously expressed concern over traffic impact fees Ellensburg imposes on this sort of development. Those fees remain a hurdle for the project, but one that Martin believes won't ultimately stand in its way, Cridlebaugh said.

"They're putting in roads, curb, gutters, sidewalk -- I think we have a pretty good shot at it," he said.

* Pat Muir can be reached at 509-577-7693 or pmuir@yakimaherald.com.