(Indianapolis Star, The (KRT) Via Thomson Dialog NewsEdge) Mar. 27--There's the Conrad Waldorf Towers. It has the original Presidential Suite, where U.S. presidents usually stay while visiting New York.

There's Conrad Miami. It has a sweeping design of concave glass that's can be seen regularly on television's "CSI: Miami."

There's Conrad Cairo. It has 669 rooms and suites, all with views of the Nile River.

And then there's the new $100 million Conrad Indianapolis.

Indianapolis?

Does that seem odd considering every other luxury-drenched Conrad Hotel in the world is in a massive, far-flung, exotic locale?

Not at all, says Jan Chovanec, general manager of Conrad Indianapolis, which officially opens to the public Monday.

This Midwestern city is hopping with motorsports, international companies, a booming tourism industry, a mayor's office that really wants a five-star hotel and private developer that's willing to fork over the cash to make it happen.

"For our company, it makes a lot sense to be here," Chovanec said.

His company is Hilton Hotels Corp., which just secured ownership of the Conrad brand name and is pushing a business strategy that would put the luxury hotels in markets across the United States.

So far, there are only four: New York, Chicago, Miami and Indianapolis. Our Conrad is the only one built from the ground up. The rest are rebranded Hilton-owned hotels.

Why was Indianapolis first?

"We have always felt that luxury doesn't need to be only in gateway cities," said Timothy A. Benolken, area vice president of operations for Hilton, based in Beverly Hills, Calif.

Indianapolis is not a gateway city -- a New York, a Seattle, a Boston --but it's not exactly the boonies, either. Indy has the ambition to shrug off its "secondary city" reputation and become a gateway city.

Motorsports are certainly fuel for that ambition.

Indianapolis hosts four major racing events every year: the Indianapolis 500, U.S. Grand Prix, All State 400 at the Brickyard and NHRA U.S. Nationals.

Those races not only draw thousands of people from other states, but thousands of people from other countries.

"There are probably thousands and thousands of kids all over the world who grew up wanting to come to Indianapolis and drive a race car," said Matt Steward, director of motorsports development for Indiana.

"No, we don't have tropical weather," he added. "We are an exotic location in terms of motorsports."

Indianapolis' largest companies -- Eli Lilly and Co., Rolls-Royce, WellPoint -- also draw a fair number of international visitors.

Lilly has backed building the Conrad from the beginning, said Ed Sagebiel, a spokesman for the pharmaceuticals giant.

"We believe it helps to broaden the hospitality options for our guests," he said. "We have a number of visitors from around the world."

That's good for the Conrad because the brand is better known overseas than in the United States. At least for the moment.

"Some markets help us open doors, and help us to introduce ourselves," Benolken said.

That's why Indianapolis.

Then there's the money, of course.

It was officials from developer Circle Block Partners LLC and Mayor Bart Peterson's administration who sold the Conrad Indianapolis idea to Hilton Hotels Corp.

They made it sound good. They wooed Hilton with tax incentives, including more than $8 million in property tax incentives, and about $24 million in total public financial support, including a nearly $4 million equity investment. They made it sound coordinated, Benolken said.

"We're opportunistic," he said. "We have to admit, their passion, it was infectious."

Everything just came together to create Conrad Indianapolis, said Al Kite, president of privately held Circle Block Partners, which isn't affiliated with Kite Realty Trust.

"The mayor is one of the primary reasons the Conrad is here," he said. "He wanted to make sure we had a first-class luxury hotel. The city controlled the land, and it was their vision to use it."

Other luxury hotel chains were considered. Starwood's W Hotels, for instance.

But in the end, the appeal of being able to say, "We have a Conrad," pushed Indianapolis officials Hilton's way, said Deputy Mayor Steve Campbell. Not many cities can say that, after all.

It was always a two-way street, he said.

"The Conrad folks and the Hilton folks wouldn't have come here unless they thought it was a good idea," Campbell said.

Analysts agree Hilton Hotels has little to lose putting a Conrad in Downtown Indianapolis.

"There was somebody with money who wanted to build a hotel," said William Crow, an analyst for the firm Raymond James in St. Petersburg, Fla.

Those people aren't easy to find these days. Construction costs have jumped dramatically; hotel room rates are just now getting back to pre-9/11 levels, but there has been six years of inflation on the cost side; and there's a lot of competition for land.

Hilton, like most hotel operators these days, is in the franchising business to minimize costs. It is providing its coveted Conrad brand name and massive customer base, but Circle Block Partners owns the building.

"It's really kind of a no-risk situation for Hilton," said Rod Petrik, an analyst for Stifel Nicolaus in Baltimore. "They're going to be taking franchise fees up front and after it's completed."

Financing aside, Indianapolis is a good, solid market for hotels, Crow said. The convention travel market is growing. So is the leisure travel market.

Indianapolis has reached the point where it needs a luxury hotel to reach the next level of development, said Bob Schultz, spokesman for the Indianapolis Convention & Visitors Association. The city's growth is at critical mass.

"It is the continued evolution of our Downtown corridor," he said.

But still, Crow, the analyst, said Indianapolis is a "strange" market for Hilton to enter with its first new Conrad in the United States.

"Indianapolis was kind of chosen for them, instead of Hilton choosing Indianapolis," he said.

The analysts agree the next Conrads you'll see will be in top-tier, gateway markets, not second-tier Midwestern cities.

But Benolken said Hilton is exploring other possibilities in the Midwest. He wouldn't name names.

Midwest or East Coast or West Coast, Conrad Hotels will never become common, he said. The luxury will remain exclusive to certain cities.

"You're not going to see them pop up like Hampton Inns," Benolken said. "And we love Hampton Inns; they're our fastest-growing brand. But this is a very exclusive brand and all the elements have to be right."

Apparently, all those elements were right here.

That's why Indianapolis.

CONRAD INDIANAPOLIS

-- 241 guest rooms.

-- 10,000 square feet of meeting space.

-- Ballroom with 4,852 square feet, 18-foot ceiling.

-- Spa, fitness center, swimming pool and whirlpool.

Other Conrad sites

Where to find other Conrad hotels:

-- In the United States: New York City, Chicago, Miami.

-- In other countries: Australia, Belgium, China, Egypt, Indonesia, Ireland, Japan, Singapore, Thailand, Turkey, United Kingdom, Uruguay.

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