Proposal for downtown Tucson hotel takes key step forward

Rio Nuevo board tentatively 0Ks $4.3M loan for possible Marriott
2013-07-16T00:00:00Z 2014-04-08T18:41:12Z Proposal for downtown Tucson hotel takes key step forwardDarren DaRonco Arizona Daily Star Arizona Daily Star
July 16, 2013 12:00 am  • 

Tucson moved one step closer to realizing a new downtown hotel Monday.

The Rio Nuevo board voted 4-1 to have its attorney draft a $4.3 million loan agreement with developer Scott Stiteler for a proposed Marriott hotel at Fifth Avenue and Broadway.

The 139-room, seven-story hotel would be the centerpiece of Stiteler's ambitious plan to create a downtown entertainment district around the intersection of Fifth Avenue and Congress Street.

With downtown Tucson undergoing a renaissance, Stiteler said it's vital to bring all the projects together to transform downtown into even more of a destination for local revelers and visitors.

"This is an inflection point for downtown Tucson where we are going from a collection of many individual success stories, and now we're in a position to raise the bar," Stiteler said. "It's now time to connect those individual projects with large projects ... and deliver all the different reasons for people to stay here and frequent all the businesses."

For its money, Rio Nuevo would retain ownership of about 218 parking spaces spread throughout a four-level garage. To pay back the loan, Stiteler's group would sign a 30-year lease to rent the spaces for $80 a month per space. It's also estimated the district would receive around $10 million in sales and bed taxes from the hotel over a 12-year period.

Stiteler is also still seeking an eight-year property tax exemption from the city and a $7 million loan through the city's Community Development Loan Fund to complete the financing of the $27 million hotel project.

Rio Nuevo Chair Fletcher McCusker, who recused himself from the discussion over a conflict of interest, said Stiteler's plan not only brings a "world class property" to downtown Tucson, it would satisfy Rio Nuevo's legal mandate to invest in a downtown hotel before its spending restrictions are lifted.

Not every one was enamored with the plans.

Board member Alberto Moore opposed the deal because he said if the district gives Stiteler that much money, all the other folks with hotel plans will expect a similar amount. And the district just doesn't have the money for that, Moore said.

Even though Rio Nuevo's attorney must untangle an assortment of legal issues before any draft can be presented to the board for a final vote, Rio Nuevo attorney Mark Collins said, it should ultimately go forward.

If the board ends up approving a final deal, it must then be presented before the mayor and City Council for approval.

Site Changes

While the original site for the hotel was at Fifth Avenue and Congress, Stiteler, manager of Tucson Urban LLC, said with the type of Marriott proposed, the Broadway site behind the Hub restaurant was a better fit.

The hotel won't be your typical Marriott, at least for American visitors.

A few years ago, Marriott purchased an upscale chain of European hotels, said Scott McAllister, a vice-president of development with Marriott, and recently decided to bring the brand to American urban centers.

McAllister said the AC Hotel brand eschews "cookie-cutter" approaches and instead relies on upper-scale design motifs unique to each hotel.

If Marriott gives the green light to Tucson's hotel, it would become the fourth one approved. Stiteler said he expects a decision sometime in August.

By the numbers

139

number of rooms

7

number of stories

4

number of levels of the parking garage

$27 million

hotel price tag

$10 million

estimated amount to be paid to Rio Nuevo over 12 years

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Latest Election 2014 video

More

Election 2014: Early ballot deadline and where to vote

Learn how to turn in your early election ballot or find your polling place with the help of Star reporters …

Follow the Arizona Daily Star

Featured businesses

View more...

Deals, offers & events

View more...
Get weekly ads via e-mail