This affinity for "character" has led to the rise of boutique hotels, defined not only by size, but by design - typically historic in nature. One of the pioneers was Bill Kimpton, whose foresight created the Kimpton Group. Others leaders in the field include Ian Shrager and Andre Balazs. This affinity for character has also prompted larger projects, such as Sage Development's proposed Marriott Renaissance in a redeveloped Portland, Oregon department store which will have 330 rooms.

As a result of the success of these and other pioneers, hotel developers are often on the prowl of unique opportunities, thinking about the hotel potential of transforming warehouses, office buildings, Masonic temples, train stations and more.

In one very large way, government policy supports this practice. Tax laws allow 20% of the costs of a "certified" rehabilitation of a "certified" historic structure to be used in the form of a tax credit. Under the right circumstances, that credit can also be transferred and sold, thereby bringing money into the rehabilitation project itself. Complementing this federal program often are state and local incentives that use many of the same rules, guidelines and even reviews. All are designed to make the re-use of old buildings financially ...