Coronado Hotel for sale

Situated on the edge of the newly renovated Fourth Avenue underpass, the Coronado Hotel Apartments has provided low-income housing since 1991 after the Downtown Development Corp. bought and renovated the building at 402 E. Ninth St. The three-story property has 42 units and is listed for $670,000. Grubb & Ellis is handling the listing.

Residents, many of whom have lived there for years with the help of federal rent subsidies, will have a year to find new homes.

Glenn Lyons, CEO of the Downtown Tucson Partnership, which manages the Downtown Development Corp., said it was time to sell.

"The Downtown Development Corp. owns the building, and they were pretty much a break-even operation," Lyons said. "There is not enough money in that operation to finance doing major improvements to the building."

Lyons said he could envision the property being renovated to mixed-use office space or perhaps again serving as a hotel with a cafe. Perhaps the new owner will continue to provide affordable housing to low-income elderly people, he said.

Once a sale goes through, the Downtown Development Corp. will put the proceeds toward small infill projects, although Lyons couldn't say what those would be.

"What exactly they are, we are not sure yet," Lyons said.

A random survey of a handful of residents at the Coronado Hotel Apartments Tuesday morning found that nobody wanted to move.

The old hotel is not perfect, the residents said. It can be noisy, particularly when people honk horns going through the Fourth Avenue underpass. There can be vandalism during events such as the street fair. And more security would be nice. But the residents like the location and the close community.

"We're going to have to go," said Teresa Arroyo, who has lived there for nearly three years. "I don't think anyone really wants to go. I like the location. We're close to the bus station. We're close to Primavera," a shelter and social-service center.

Lyons said he was sympathetic to the residents, but he thought the year lead time would allow them to find new homes, particularly in a weak rental market with plenty of space available.

But to City Councilman Steve Leal, who has often spoken about the need for affordable housing, forcing the residents of the apartments to move is unconscionable.

"Some people just see resources as an opportunity for their own agenda," Leal said. "They shouldn't have to move. It shouldn't be sold."

Leal said he doubted all of the residents could find new homes, and he noted the Coronado Hotel was renovated through federal grants and tax credits specifically for affordable housing. Those tax credits required the Downtown Development Corp. to manage the housing project for 15 years, Star archives show.

"Turning low-income people's lives upside down to provide investment money for real estate speculators, well, the partnership should find it someplace else," Leal said. "This is wrong. This is not what Tucson is supposed to be about."

Leal then questioned whether this was an attempt to move low-income people out of the downtown area, particularly after the renovation of the Fourth Avenue underpass.

"For some people, redevelopment means physically improving it. For other people, it means getting rid of people," he said.

Lyons said that characterization is off-base.

It was never the Downtown Development Corp.'s plan to manage the housing project indefinitely, he said, and he maintains that the one-year lead time, coupled with housing vouchers to help with the move, ensures that residents will have quality housing.

"He is wrong," Lyons said, adding, "I was pleased when I heard that there was a voucher system and 12 months' notice. It gives people plenty of time."

DID YOU KNOW

The Coronado Hotel was built in 1928 and was listed on the National Registry of historic Places in 1982. It was restored in 1991 by the Downtown Development Corp., which bought the hotel at the very end of 1989 for $150,000.

Source: Star archives.