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Treasure Island Resort and Casino recently broke ground on an $86 million project that will significantly increase and upgrade its hotel rooms.

The Prairie Island Indian Community that owns and operates the Caribbean-themed casino, located 40 miles south of the Twin Cities outside of Red Wing, plans to build two hotel towers providing 184,000 square feet of combined space. The buildings will add 300 new hotel rooms to the nearly 500 the resort has currently.

"For the past couple of years, our occupancy rate is almost 100 percent," said Cindy Taube, spokeswoman for the resort. "Within the hospitality industry, that is not very common. The demand for rooms was always very high."

With the appeal of entertainment acts such as singer Diana Ross and comedian Gabriel Iglesias that the resort attracts and the popularity of its new water park, the need to expand its hotel capacity has grown, Taube said.

The first phase of the project is expected to be completed late next year. One tower will reach eight stories while the other will be seven. Both will be connected to the current hotel.

The majority of the new rooms will be standard, while 60 suites will occupy the upper floors overlooking the bluffs of Prairie Island. The new hotel rooms will also feature upgraded amenities, such as walk-in showers.

Along with the towers, there are plans to add a new restaurant and bar with outdoor seating above the hotel's bowling center by next July. The hotel's current lobby will also be renovated with self check-in stations and an expanded concierge desk.

"It just improves the overall customer experience when you walk through the door," Taube said.

This is the second major project this year for Treasure Island.

In February, the casino opened the $19 million Lagoon Water Park and Wave Spa. Since its opening, the water park has had around 80,000 visitors, Taube said. As part of the first phase of renovations, a larger swimming pool, activity pool, changing rooms and other amenities will add 3,200 square feet of more space to the water park.

In the next phase of improvements, the nearly 200 rooms in the resort's Buffalo Tower will be remodeled in 2018 to match the other upgrades.

Knutson Construction and RSP Architects, which have both helped with several of the resort's projects including the new Tado Steakhouse and the renovation of the resort's Tradewinds Buffet, will work on the new renovations.

The casino estimates that the total project will create more than 200 new construction jobs and 150 new permanent positions at the resort.

Nicole Norfleet • 612-673-4495

Twitter: @nicolenorfleet