NATCHEZ — Construction of a new hotel near downtown is expected to begin within 90 days, developers said Wednesday.

A Mississippi-based investor group closed the purchase of approximately three acres of land along Canal Street on Wednesday.

The soon-to-be formed Natchez Hotel Group Inc. plans to build a Holiday Inn Express and Suites on South Canal Street between the Hampton Inn and the Isle of Capri Casino Hotel.

The land purchased is a portion of a larger tract of land owned by former Natchez Mayor Larry L. “Butch” Brown.

Developers say the total investment for the 80-room hotel will be approximately $6 million. When constructed, it will become the fourth new hotel constructed in Natchez since 2007.

“We’ve been in the hotel business for 20 years,” said Sunny Desai, the Durant man who leads the investor group. “We know that certain hotels are doing pretty good with occupancy and rates. Midscale hotels without restaurants are doing really well now.”

Desai and his family are directly involved with the ownership and management of four hotels. The new investment group — which he said includes people from all walks of life in Mississippi, but no one from Natchez — just completed construction of a new Holiday Inn Express in Winona.

Desai said the growth of other hotels in the area, in part, attracted the group to look at Natchez.

“To a point it may look like this market is saturated,” he said. “But from a hotelier’s point of view as long as you have the brand, you can still capitalize.”

Desai said several people he’s met in Natchez have told him, “There’s already so many hotels in Natchez you’re not going to make any money.”

Desai said the lack of a Holiday Inn Express brand in Natchez will be key to their success.

“We did a feasibility study and it turned out good,” he said. “Holiday Inn Express is a good brand, and it brings its own business with the brand.

“Because this market attracts a lot of tourists, people look for the brands they like and they are familiar with. They’ll stay there every time they travel. They want that consistency everywhere they stay.”

Desai said with the land now purchased, he expects construction to begin within the next three months and anticipates completion in January 2012.

Desai said initially developers were surprised by the high prices for commercial land in the area, but that he views that as a good sign for the future.

“When you see rising costs of land, you see the area is poised for economic development,” he said. “It’s a very, very good sign for Natchez.

“We’re trying to get the city involved as much as possible,” he said. “We’re here long-term, we want to work with the city to develop it right. For any business owner, it’s not what you can do right now, it’s what you can do long-term.

Although not directly involved in bthe new development Natchez’s economic development community welcomed the news of the investment.

“We’re proud to have such a national brand such as Holiday Inn Express showing such a commitment to our local economy and continuing to extend the hotel-motel services to both tourists and our residents,” said Natchez Inc. Executive Director Chandler Russ. “It shows some good signs of optimism for the future.”

Desai said he is optimistic about the hotel’s long-term success.

“We don’t want to be the biggest hotel in town,” Desai said. “We just want to be the nicest hotel.”