Developer Humberto Lopez proposes to upgrade and rebrand the Hotel Arizona, above, as a Doubletree. JAMES S. WOOD / ARIZONA DAILY STAR

The Tucson Metropolitan Chamber of Commerce put the City Council on notice this week that it supports downtown developer Humberto Lopez in his quest to turn his Hotel Arizona into a Doubletree and build an Embassy Suites next door.

Lopez, who five months ago was threatening to recall the mayor and two City Council members, had a previous proposal to have taxpayers buy Hotel Arizona for $28 million rejected by the city. He pitched his new plan to the council two weeks ago.

He said he needs the city to sell $17 million in bonds to upgrade his hotel to convert it to a 274-room Doubletree. Lopez said a new 428-space parking garage needs to be built by the city as well.

The city would then need to lease the hotel property from him for $1.6 million a year for 99 years. The annual lease payments would allow Lopez to pay down the more than $20 million in debt he has on the Hotel Arizona property without having to pay taxes on the sale of the property.

Lopez said he wouldn't simply sell the hotel to the city rather than lease it, because the sale would trigger a large tax bill, even though all the proceeds of the sale would go to pay his debt on the hotel.

He said the cash flow from the Doubletree would pay back the city's bond money and, even with the lease payments, the city still would make a profit of $1.4 million annually. He also said the city could earn about $1 million in additional taxes from the deal.

But if the hotel did not meet projections, Tucson taxpayers could be on the hook for the losses.

Under Lopez's proposal, he would build a 226-room Embassy Suites next door to the Doubletree within three years of completion of the city-built parking garage.


The local Chamber of Commerce announced several days earlier that it also supports the new $190 million taxpayer-funded convention center hotel to be built downtown by Garfield Traub.

"This will create 500 jobs directly and an estimated 3,000 indirectly," chamber CEO and President Jack Camper wrote in a letter to the mayor.

Contact reporter Rob O'Dell at or 573-4346.