The Willow Valley Inn & Suites will be razed to make way for a new development of stores, services and restaurants, its owner said Tuesday.
Demolition of the 160-room hotel, restaurant and bakery along Willow Street Pike will start in December.
Owner Willow Valley Associates said plans for the 87-acre southern section of its property which contains the inn have yet to be finalized.
But it said the goal is to create a development that enhances the community and the north side of the Willow Valley complex.
That north section includes the recently opened DoubleTree Resort, as well as a golf course, a chapel and other amenities.
The Willow Valley Inn includes the original 30 rooms at the property, which opened in 1966 and grew into a leading lodging complex here.
Between the hotel, the 600-seat restaurant and the bakery, the Willow Valley Inn has 139 employees.
"This is a very difficult decision because of our heritage and our team members there," said Sheryl Holzbauer of Willow Valley Associates.
"It's not a decision we want to make. But when you look at (the business), it becomes very clear that it's a decision we have to make," she said.
Holzbauer said the inn has features - such as narrow hallways and some outside room entrances - that guests no longer want.
Those are structural features of the building, not cosmetic items or furnishings that can be easily refreshed.
Consequently, "it wouldn't be feasible to bring (the inn) up to what people are looking for," she said.
Holzbauer said Willow Valley Associates will do "everything we can" to find new jobs at its other ventures for the affected employees.
The staff of the inn, including the bakery and restaurant, consists of 81 full-time and 58 part-time employees.
Holzbauer, executive vice president of community relations, said Willow Valley Associates has no timetable for finalizing its plans.
"We're in the very early stages," she said.
Having yet to pin down the new uses it will develop, Willow Valley Associates has yet to determine the new venture's size, work force and cost.
But the price tag is sure to be in the tens of millions of dollars.
The 87-acre area in West Lampeter Township runs from Willow Valley Drive south to the corner of Willow Street Pike and Route 741.
The land is zoned commercial, Holzbauer said.
Tuesday's announcement comes two years after Willow Valley Associates completed converting the north side of its resort and conference center into the DoubleTree.
The 185-room DoubleTree includes the popular Palm Court atrium space for dining and meetings.
The opening of the local DoubleTree, a brand that's part of Hilton, brought a lodging franchise to Willow Valley for the first time.
In addition to that $7 million makeover, Willow Valley Associates at that time invested $1 million in updating the Willow Valley Inn.
In addition to its Willow Valley Inn and DoubleTree complex here, Willow Valley Associates owns and operates: two Hilton hotels in Harrisburg, Willow Valley Square shopping center (home to Darrenkamp's Market and other stores), Willow Valley Lakes Business Center, Willow Woods Apartments and Willow Woods Village Townhomes.