The Clarion Hotel Waco at South Fourth Street and Interstate 35 will close in mid-August, having been bought by a group that proposes to redevelop the site with stores and restaurants, sources that include the general manager of the 148-room property near Baylor University confirmed Tuesday.

The closing is creating problems for an array of would-be users, including Baylor University, which had reserved rooms for student orientation sessions when the fall semester begins.

“There definitely are customers who are not pleased,” said general manager Monica Salter in a phone interview.

Choice Hotels, the corporate parent of the Clarion, released a statement that said the property had been sold to a group called DW 801 4th Street LP. This group, according to the statement, is “planning to redevelop the property to provide new business and employment opportunities to the Waco, Tx, economy.”

It said the hotel will operate under the Clarion brand through Aug. 10, and then as an independent hotel until the morning of Aug. 17, after which it will be closed permanently.

O’Neals Auctioneering & Appraisals of Waco will sell the contents of the hotel at a public auction on Aug. 22 and 23.

“We’ve called every person with reservations, letting them know we’re closing the doors,” Salter said.

She said Choice Hotels also serves as the corporate parent of six other properties in Waco - two Quality Inn and two Comfort Suites locations, a Roadway Inn and a Sleep Inn - and is trying to find those with reservations at the Clarion Hotel accommodations at these sites, if the customers are interested.

Salter said she has heard “a million things” about what the Clarion site may become, but nothing official.

Corey Duhon, a spokesman for DuWest Realty in Dallas, said by phone his agency will market the site for the ownership group.

“We really don’t have any immediate plans, but a property at that location demands something better than a Clarion Hotel,” he said.

He said “retail and restaurants” likely will find their way to that site, adding that the hotel definitely will be leveled.

The DuWest website says the company works with developers, owners and tenants “which have assisted us in leasing millions of square feet throughout the Southwest United States.” It goes on to say that DuWest is involved not only in leasing but in property management and disposition of assets.

Liz Taylor, director of convention activities for the city of Waco, said she was disappointed to learn the Clarion would be closing. She said its proximity to the Baylor campus has made it one of the community’s most valuable lodging assets, one that probably would have grown in popularity with the opening of the $266 million McLane Stadium.

“That is a great location, and whatever goes in there will have a great chance to catch traffic,” Taylor added.

Baylor spokeswoman Lori Fogleman denied rumors that Baylor bought the property, saying, “We just learned about the transaction ourselves.”

She said about 20 families had reserved rooms in the Clarion to attend Baylor-related orientation sessions when students are arriving to begin classes.

“And a number of alumni are trying to figure out what to do about Homecoming,” Fogleman said of the Oct. 31 weekend.

Even with the loss of the Clarion Hotel, Waco will be seeing a net gain in hotel rooms in the near future, as new properties arrive.

It was announced in June that a 92-unit TownPlace Suites by Marriott will become the third lodging establishment to locate in the Legends Crossing development on State Highway 6 near Baylor Scott & White Hillcrest Medical Center. Meanwhile, McNeil Commercial Real Estate in Germantown, Tenn., announced it will place a 107-room Home2 Suites by Hilton next to the Gander Mountain outdoors store to be built at South Valley Mills Drive and Interstate 35.

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