Pima County will not be buying the Coronado Hotel building.
The Downtown Development Corp.'s broker sent the county an e-mail saying its bid was not accepted on the hotel, which has been for sale since October.
The county sought to spend $700,000 in bond funds on the downtown converted hotel building to preserve the Section 8 low-income housing there, according to the bid.
County officials, including Supervisor Richard Elías, became concerned the residents would be kicked out of the building if someone without a commitment to affordable housing purchased the site for development.
Nine others also bid on the historic building at the southeast corner of North Fourth Avenue and East Ninth Street.
The Downtown Development Corp. won't disclose which offer it has accepted or who submitted the other bids, citing a confidentiality agreement with the bidders.
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A similar rejection e-mail arrived at the Community Partnership of Southern Arizona, saying its $674,000 bid was rejected, said Neal Cash, president and chief executive officer for the organization.
The Downtown Development Corp. was asking $670,000 for the building.
At least one other bidder has not heard whether its offer was accepted.
Peach Properties made an offer on the hotel, said Ron Schwabe, Peach Properties owner.
Schwabe recently purchased one of the historic warehouses on East Toole Avenue, sold because the Arizona Department of Transportation no longer needed the building for a downtown road plan.
Calls to the DDC's broker were not returned.
Cash and Elías said they hope the buyer is committed to maintaining Section 8 housing.
"The real problem with all of this is that I think it's a harbinger for additional reductions of affordable housing in the downtown area," Elías said. "It would be terrible if the same thing happens in Armory Park and other areas."
Cash said it's premature to evaluate the situation.
"Maybe the (winning) offer maintains the current use; I certainly hope so," Cash said.
Though the Tucson Department of Housing and Community Development received calls from some potential bidders before the deadline for offers, no one has made contact since the bids were opened last week, said Albert Elías, department director.
The city housing department manages the federal housing funds used to support rent from low-income residents at the hotel.
The DDC has said it intends to announce the buyer in about a month.
Contact reporter Andrea Kelly at 807-7790 or akelly@azstarnet.com
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