Lopez: He makes deals

Now he has a deal for you.

Lopez and two partners have prepared a $185 million redevelopment of the Hotel Arizona, formerly the Radisson City Center, at 181 W. Broadway. Under the plan, Lopez's partnership would act as a developer working for the city to refurbish the existing hotel and build new 16- and 22-story towers that would add 400 new hotel rooms, luxury condominiums and offices.

The city would be given the option of taking ownership of the expanded hotel within the next few months, but would also have to sell a strategic piece of land downtown. And if construction costs continue to rise, the developers may ask the city for waivers on fees or property taxes.

The ambitious plan is something of a return to familiar haunts for Lopez, president and co-founder of HSL Properties Inc.. He was deeply involved in Downtown redevelopment for more than a decade but pulled away in 1987, when he moved his company headquarters out of Downtown. He said he was frustrated by city bureaucracy. He eventually settled at the HSL's current headquarters, 3901 E. Broadway.

But he couldn't pull away completely. He owned several hotels Downtown.

"It's not like a suitcase where I can pick it up and move it out and leave Downtown," Lopez said. "I would have done that a long time ago if I could have."

Not just a deal

But Lopez doesn't just have a deal. He has a story.

Sitting in his office adorned with art collected while traveling, Lopez recalled last week how he became a millionaire — after living on welfare.

Born in 1945 in Nogales, Ariz., Lopez lived with his family in Mexico, where his father, Cipriano, owned and managed farms and ranches. After his father's death, his family moved back to Nogales.

Ownership of some ranches was disputed in Mexican courts. That's when things became so bad that Lopez's family had to live on welfare, he recalled. He remembers standing in line with his mother, waiting to receive handouts of food.

The oldest of six siblings, Lopez worked full time while going to Nogales High School. He graduated in 1965, earning grants and taking loans to attend Cochise College and then the University of Arizona. During the summer, he picked lemons and watermelons, and worked a stint as a carpenter.

"Boy, that was hard work. I said, 'This is not something I want to do with the rest of my life,' " Lopez said.

He resolved to himself that he would become wealthy.

Lopez graduated from the UA in 1969 with a bachelor's degree in business administration with a focus on accounting. He spent almost six years working as a CPA for Deloitte, Haskins & Sells in Los Angeles.

Help from an uncle

Lopez's first private deal in real estate happened in Nogales, he said. An uncle lent him $1,000 as a down payment on a $3,000 lot. Within a few months, he sold the lot for $6,000.

But Lopez's wealth would come later, after he and five Army Reserve buddies pooled money for a $27,000 down payment on a $310,000 apartment building in California's San Fernando Valley. Six months later, it sold for a $50,000 net profit.

Thus began Lopez's "syndicating" deals. His method is to obtain funding to buy or construct buildings by bringing together investors who can contribute to a down payment and an operating fund. Additional funding comes from conventional loans.

As the properties generate income, investors are paid off first. Then Lopez takes his cut. Dividends are split among investors, depending on the deal.

"By the time I was 30, I had made my first million," he said.

Lopez's first purchase in Tucson came in the late 1970s, when he bought the former Clarion Santa Rita Hotel & Suites, 88 E. Broadway. (He's now partnering with Pathway Developments on a $40 million redevelopment of the hotel).

After years of buying properties, HSL Properties declared bankruptcy in 1992, an outcome, he said, of the savings and loan industry's collapse.

"Cash was very scarce and it was a lot cheaper to borrow," Lopez said. "We couldn't afford to make all the payments."

In 2001, the fallout was still visible. An Arizona Daily Star analysis showed HSL Properties was Pima County's biggest tax delinquent, owing more than $1.25 million in tax debts.

HSL Properties, formed in 1975 by Lopez and Glenn Toyoshima, owns four hotels and 28 apartment complexes in the Tucson area. Dorado C.C. Inc., another company founded by the two men, owns Dorado Country Club Golf Course, 6601 E. Speedway.

In 2003, Lopez estimated the properties' worth at about $300 million.

Today, that figure is closer to $500 million, he said. And taxes on the company's current properties are paid up.

Diamond Rock Plaza

As part of the proposed city deal, Lopez would hand over some of his empire. After the redevelopment — dubbed Diamond Rock Plaza — is complete, the city would become owner, and the complex would theoretically pay for itself.

The proposal also calls for selling the Downtown parking lot west of the Tucson Music Hall for $2.6 million to Lopez's partnership. It would then build and own a new parking garage and tower with office and retail space. That would leave the city without a long-term revenue source, something that is drawing opposition from some city leaders.

"The city had plans to own a number of the parking garages that get built with its money," Councilman Steve Leal said. "We're going to need a revenue stream that doesn't happen through the existing general fund if Rio Nuevo money can't pay for it."

Still, Leal praised Lopez as "thoughtful and concerned" about Downtown and said he is happy Lopez has resumed a visible role in its redevelopment.

"I think (Lopez) is sort of an underappreciated guy," he said.

American success story

What many people appreciate about Lopez is his success in business and civic life.

Hank Amos, the CEO of Tucson Realty & Trust Co., described Lopez as "a true American success story."

Beyond his business, Lopez serves on numerous boards and councils, among them the Tucson Airport Authority and the Tucson Metropolitan Chamber of Commerce. He is chairman of the University of Arizona Sarver Heart Center's advisory board.

As current chairman of the University of Arizona Foundation, Lopez organized last year's search for someone to replace Richard Imwalle, who retired recently as president.

Imwalle, who worked through the end of last year as new president James H. Moore Jr. was hired, said there were weeks when Lopez spent more time working for the Foundation at no compensation than he did at his own business.

"He made a point of making sure that the process was open and that people had direct access to him," Imwalle said.

Finding Imwalle's replacement is typical of Lopez's community involvement, said Michael Hannley, president of the Bank of Tucson.

"He brought a high level of integrity to the board, and he maintained a very strategic focus and did not politicize it," Hannley said."He's kind of like the Donald Trump, who can say 'Just give it to me and I'll get it done.' "

Hein wants discussion

City Manager Mike Hein said that although he's not familiar with details of the Downtown hotel proposal, he believes more discussion is needed.

"While I don't want to discard any ideas from investors Downtown, I would imagine that the council would like us to provide some other potential ideas," Hein said.

Lopez said his faith in Hein is one of the reason he's enthusiastic about Downtown.

"I think he gets the idea. He's very receptive. He's not so concerned about job security as some of the other people over the years," Lopez said. "I think if we keep messing around with it, I think people will lose faith in Downtown and it will be a complete failure."

Age: 60

Family: Czarina, wife; daughters Iovanna and Iliana; nephew Omar.

What is his business?

HSL Properties Inc. primarily deals in purchase, investment and development of real estate. HSL Properties owns more apartment complexes in the Tucson area than anyone else. The company also owns property elsewhere in Arizona and in California and Nevada. The company is part owner of seven Santa Barbara, Calif., auto dealerships that sell BMWs, Porsches and Jaguars.

What are his positions?

● President, HSL Properties Inc.

● Chairman of the board, University of Arizona Foundation, the fund-raising arm of the UA.

● Member of World Presidents' Organization, a worldwide organization of chief executives over age 50.

● Member, Roman Catholic Diocese of Tucson finance council.

● Member, Bank of Tucsonboard of directors.

What's the deal?

Lopez is proposing a $185 million renovation of the Hotel Arizona, formerly known as the Radisson City Center, 181 W. Broadway.