Another multi-million dollar development in Ballard will expand the Olympic Athletic Club on Ballard Avenue and bring a four-star hotel to the neighborhood.

In February the health club owners purchased two properties adjacent to the club at 5300 Ballard Avenue Northwest for $3 million. The buildings, which total about 10,500 square feet, were previously owned and used for storage by Ballard Hardware and Supply.

The city of Seattle and the Ballard Avenue Landmark District Board have approved the demolition of those buildings located just south of the health club at 5212 and 5214 Ballard Avenue. Construction of a 65,000 square foot, four-story, 29-unit hotel should begin at that site by October this year, said Mark Durall, general manager of the health club.

The $14 million development also includes the expansion of the existing club on the second and third floors, 3,000 square feet of retail space at ground level facing Ballard Avenue and a three-level parking garage for 79 vehicles above and below grade.

The addition will stand 50 feet high along Ballard Avenue and 65 feet on the Leary Avenue portion.

There are plans to build a five-lane, 25-meter swimming pool, locker rooms, rock climbing wall, six-room spa, yoga and Pilates studios and new childcare center. Existing club amenities include six racquetball courts, a four-lane swimming pool, aerobics studios and more.

Current health club members who pre-pay a years' membership won't see an increase in fees, said Durall. Costs for new members and those who pay month-to-month might increase by about 2 percent.

"But it would be marginal," said Durall. "We don't have a dues increase planned following this project."

The Olympic Hotel will feature views of the Ballard Locks, Lake Washington Ship Canal and the Olympic mountains. Guests will have access to the health club, but would have to pay extra for services like childcare.

The Olympic could be Ballard's first hotel if it's built before the Silver Cloud Inn, a six-story hotel planned for along Shilshole Avenue Northwest. That project is still being reviewed by the city.

Ballard Avenue is one of seven historic districts in Seattle. The Ballard Avenue Landmark District Board regulates the appearance of new and current buildings on that street.

Demolition of the old Ballard Hardware buildings and preliminary massing and scale of the Olympic project has been approved, but the board has yet to evaluate materials and exterior design.

It isn't often the board allows the demolition of structures on Ballard Avenue, but in this case neither hold historic significance, said Heather McAuliffe, coordinator for the landmark board.

The larger of the two was built in the 1920s during what the board designates as the "period of historical significance" (1890s-1930s). However, it had been greatly altered before the street became a landmark district in 1976.

Its original storefronts had been completely removed, said McAuliffe, and it no longer contributes to the streets' historic status. The health club is currently using that building for member parking.

The smaller building was built in 1954, after the period of historical significance.

What will soon be retail space on the northwest ground level of the existing club has already been leased to the owners of Volterra Italian restaurant, also on Ballard Avenue. The new restaurant won't be an extension of Volterra but will offer breakfast, lunch and dinner, as well as provide room service to hotel guests.

Volterra co-owner Don Curtiss promised the restaurant would be "classy but approachable" with some kind of European theme. It will also feature a bakery.

"(Ballard) is an exploding area in the city," Curtiss said. "You can't go wrong with opening a business in Ballard right now."

Another smaller retail space along Ballard Avenue is still available, with preference to a restaurant, said Durall.

The Olympic building was built in 1903 and Ballard's history can be traced within its walls. It was once a saloon, a speakeasy during Prohibition, the original home of the Ballard Elks and Olsen Furniture got its start there in the 1940s. The Olympic Athletic Club opened there in 1979.

"It's been a gathering place for more than 100 years in Ballard," said Durall. "We really want it to reflect the old world charm of Ballard but provide state-of-the-art amenities."

All indications are that Ballard and surrounding neighborhoods will see significant growth during the next several years, so it made sense to plan for that, said Durall. Also, the space has the "ideal infrastructure" to support a hotel and restaurant, he said.

The club is already open 24-hours-a-day and is equipped with housekeeping staff and laundry facilities. Twenty-five years ago O'Leary's restaurant operated out of the Olympic building, so it's set up to handle a kitchen, too.

Viking Bank and Ballard Associates, a privately run financing group that owns the health club, are backing the project.

The health club will stay open throughout construction. Durall expects the hotel and restaurants to open for business by January 2009.

Rebekah Schilperoort may be reached at 783-1244 or rebekahs@robinsonnews.com