Rendering of the proposed Moxy Hotel in Downtown Tucson. The Marriott branded hotel would be on North Fifth Avenue near East Congress Street.

Freshly-minted deals with the Rio Nuevo District board could bring a new hotel to the Tucson Convention Center area downtown as well as a boutique hotel catering to millennials.

The two hotels would add a total of 225 rooms in downtown, filling an unmet need for hotel rooms identified several years ago by a state report.

The two hotels would be paid for with private funding, with Rio Nuevo agreeing to multimillion dollar deals that would allow both developers to keep a portion of sales taxes generated by each property.

The board on Tuesday agreed to allow the developer behind the proposed 125-room hotel next to the convention center, Caliber Hospitality, to keep a minimum of $2.5 million in sales tax revenue.

A second Marriott-branded hotel called Moxy, developed by Scott Stiteler, doesn’t have a minimum figure but caps the amount at $5.7 million by 2025. Stiteler is one of the developers of the AC Hotel Tucson by Marriott, which is set to open later this year.

This second hotel would be built on top of the Depot Plaza underground parking garage at 45 N. Fifth Ave., near East Congress Street.

Rio Nuevo Chairman Fletcher McCusker said the two deals are very different than ones previously approved by board, requiring no up-front incentives to private developers.

“All of the other deals we’ve done we’ve put up serious cash,” he said. “This is an unbelievable opportunity for us.”

McCusker noted Marriott signed off on a second hotel early on, convinced that downtown Tucson is an excellent investment.

Councilman Steve Kozachik, whose ward covers downtown, is confident the city can find a way to accommodate both hotels.

“We can find a way to make this work,” he said.

Rio Nuevo officials suggest the hotels could break ground later this year.

Contact reporter Joe Ferguson at jferguson@tucson.com or 573-4197. On Twitter: @JoeFerguson

Reporter

Reporter with the Arizona Daily Star. I cover politics as well as the city of Tucson and other municipalities in Southern Arizona.