Tucson received four detailed plans for a top-of-the-line convention center hotel — one short of the five expected because two developers combined their efforts into one proposal.
Southwest Value Partners, a real estate investment firm founded by Phoenix Suns majority owner Robert Sarver, and General Growth Properties Inc., which owns Park Place mall, joined Texas-based Faulkner USA in pitching a 700-room, $188 million Hyatt hotel on the Tucson Convention Center grounds.
Previously, Sarver and General Growth had proposed a hotel on land owned by another submitter — Downtown landowner Allan Norville. But they had to find another location because they couldn't strike a deal with Norville for his property west of the TCC.
Jaret Barr, the city's project manager for the hotel, said the city stipulated developers had to control the land they were proposing to build on, forcing Sarver and General Growth to join up with Faulkner.
City officials hope to choose one of the plans before Thanksgiving.
All of the developers said they would use the city's access to low-interest, tax-exempt financing to build the hotel, meaning it would be owned by a public entity and operated by the hotel chain.
City officials expect the hotel to be so profitable it will help pay off debt on the proposed new $130 million, 12,300-seat arena planned nearby, in addition to paying for itself.
Three of the four respondents proposed more than 700 rooms, which is what the city asked for.
Only Norville and Chris Ansley, the developer of the JW Marriott Starr Pass Resort & Spa, did not propose 700 rooms. They proposed a $101 million, 450-room Marriott hotel that included a future expansion of 300 rooms for $111 million.
Their proposal would develop all the publicly owned land between the Tucson Convention Center and Interstate 10, along with a portion of the land Norville owns in the same area. The plan includes offices, restaurants, parking, retail and a gem museum
Barr said the city's request didn't specifically rule out a smaller hotel, but he was sure the first question to be asked of Norville and Ansley is why the hotel is only 450 rooms. "That's going to be a question they'll have to address," Barr said.
Barr said all developers submitted justifications for their cost estimates and their estimated revenue per room, but Barr said that is proprietary information because of the competitive process.
The city is excited about the response because all but one of the proposers suggested a 700-room hotel, which some hotel experts had said was too much for the Downtown area, Barr said.
In addition, Barr said, all four of the main convention center hotel operators — Marriott, Hyatt, Hilton and Sheraton — are part of the competition.
The other proposals include an expansion and redevelopment of the Hotel Arizona by Phelps Development LLC and Hilton Hotels. This was the same plan Hotel Arizona owner Humberto S. Lopez and developer Roger Karber presented to the City Council in April. The plans call for a new 28-story tower to expand the hotel to 709 rooms and adding a spa, retail stores, restaurants and convention/ballroom space at a total cost of $166 million.
Texas-based Garfield Traub proposed a 707-room $203 million Sheraton hotel on city land near the main TCC entrance on Granada Avenue. There would be a 14,000-square-foot ballroom to complement the TCC convention space along with a full service restaurant, bar and lounge. It would also include retail space and, potentially, condominiums.
The only developer to propose substantially changing the existing footprint of the area was Faulkner, Sarver and General Growth, who want to wedge their hotel between the Leo Rich Theater and the TCC.
The group also wants to move the proposed $130 million arena from the current planned location near I-10 to what is now a parking west of the TCC.
Carl Winston, director of San Diego State University's hospitality and tourism-management program, warned that residents shouldn't decide which proposals they like based on artist renderings supplied by the developers because they are sure to change due to costs and input from city planners. The focus should be on the hotels' financing, developer experience in building convention hotels and how committed the hotel chain is to the plan, he said.
"The pictures are always not true anyway," Winston said. "I wouldn't get too hung up on the pictures."
