It looks as though Tucson will finally get a downtown hotel.
The City Council unanimously approved a tax incentive package Tuesday for developer Scott Stiteler’s proposed Marriott hotel at Fifth Avenue and Broadway.
City staff will now draw up the paperwork for Stiteler’s project to receive about $6.7 million in tax breaks over eight years and an $8 million loan from the city’s Community Development Loan fund.
Stiteler’s project qualified for the city’s business incentives since its benefits outweighed the amount of tax breaks it will receive, said Chris Kaselemis, the city’s economic initiatives director.
The hotel is expected to generate around $17.9 million in revenue for the city, county and other taxing districts over the eight-year period.
Kaselemis said the approval was the largest project to qualify for a tax inducement since the city implemented its business incentive program about two years ago.
Stiteler said he appreciated how the city, Rio Nuevo and others in Tucson have supported the project.
“It’s nice to have everyone saying yes,” said Stiteler, manager of Tucson Urban LLC.
Stiteler’s project calls for a 147-room, eight-story hotel and is expected to cost around $31 million.
The project should break ground in seven months, with the hotel opening its doors 15 months later.
The council also received an update on Tucson’s attempt to implement its new impact fees.
The city will miss the state-mandated Aug. 1 deadline to amend its impact fee regulations. That means the city can’t charge fees for new developments within city limits until a plan is in place.
Public hearings and other mandatory meetings are scheduled over the next six months. If everything goes smoothly, the city could resume collecting impact fees on Dec. 23, said Nicole Ewing-Gavin, program director for the city’s Office of Integrated Planning.
The nearly five-month delay will cost the city about $3.2 million in lost revenue, but it could spur a construction boom as developers take advantage of the fee break.
“They’d be fools not to line up at the planning department offices like customers at a dinner rush,” said Councilman Steve Kozachik. “Why wouldn’t they take advantage of our failure to hit a deadline?”
Planning and Development Services Director Ernie Duarte anticipates 80 commercial development plans and nine residential subdivisions, totaling about 1,700 single family lots, will seek permits during the time the city can’t charge fees.
In other action
The council voted 6-1 to approve final adoption on next fiscal year’s $1.265 billion city budget. Kozachik was the dissenting vote.
The council also agreed to hire an outside firm to conduct a national search for a city manager and prohibit any interim manager from applying for the permanent job.
The council will select an interim manager by early July.