Downtown Tucson's former Hotel Arizona could reopen by 2019

An artist’s rendering of the hotel’s entrance after the proposed renovation of the former Hotel Arizona downtown.

The Tucson City Council signaled Tuesday night that they would sign off on millions of dollars in incentives to remodel long-closed Hotel Arizona in downtown Tucson.

The HSL Properties-owned hotel, at the corner of West Congress Street at South Granada Avenue, has been closed since 2012. Under the plan it would receive a $45 million facelift with plans re-open it as a 296-room Hyatt Regency-branded luxury hotel in early 2021.

For its part, the city would give the developers up to $1.85 million through a set of tax breaks over eight years. Property taxes and other taxes on the renovated property would be waived through a Government Property Lease Excise Tax during the first eight years after construction.

The Rio Nuevo Multipurpose Facilities District has also pledged to give several million dollars in tax incentives in a multi-year deal to HSL properties to redevelop the hotel.

Overall, the total direct economic benefit of the newly-remodeled hotel would be $20.1 million annually, according to an estimate from city officials.

Councilman Steve Kozachik said the deal is similar to what has been historically offered to other developers.

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Over the last seven years the hotel owner Humberto S. Lopez has repeatedly tried — and failed — to convince the city to give him a taxpayer-subsidized deal to renovate the hotel.

What is still up in the air is what HSL Properties will do with the recently cleared site just west of the hotel. Up until its demolition, the parcel was a parking garage.

A representative for HSL declined to talk with the council Tuesday night about the company's plan for the parcel.