Oct. 8--A $2.408 million contract on a prime piece of Tulsa Development Authority property across from the BOK Center was offered Tuesday to a Fort Smith, Ark., developer who wants to build a Hampton Inn & Suites.

Because the price set by the authority on the parcel at Third Street and Denver Avenue is more than the $1.75 million proposed by the developer, CSK Hotels, and comes with stipulations, the development group has not yet committed to proceed with the project.

Before the city's real estate arm decided to offer the contract, at least one authority member, Vice Chairman George Shahadi, questioned whether having a Hampton Inn & Suites next to the steel-and-glass arena made sense.

"My concern is that we've just built an iconic architectural structure, and my experience with Hampton is that it's a middle-of-the-road hotel," Shahadi said.

But Chris Whitt of CSK Hotels said the building wouldn't have a typical Hampton Inn design. "The inside of the box would be a Hampton, but the outside of the box would be what we want it to be," he said.

Whitt also defended the strength of the Hampton brand, which is an affiliate of Hilton Hotels.

One of the stipulations by the authority is

that it will have final approval of the design.

As first reported on tulsaworld.com, the proposed $15 million hotel would be seven to eight stories tall, have 120 to 140 guest rooms, a pool and courtyard, 6,000 square feet of meeting space and a 106-space surface parking lot. It would employ about 35 people.

Storm Nolan of CSK Hotels said ground-floor retail space might become a component of the project if it is feasible.

Construction would start within eight months of closing with a completion target date of August 2010, he said.

"I don't think anyone else would commit to such an aggressive time frame," Nolan said.

The development group said it has tax-exempt funding generated by previous projects, along with cash in hand, to do the project without bank financing. But it must declare the project by Monday and close on the property by January in order to use the tax-exempt funds.

In addition to a lower purchase cost, the development group had proposed paying the total in three installments over two years with no interest.

The authority decided that interest would have to be part of the deal if installments were necessary and that it would hold a mortgage and personal guarantees on the property until the total is paid.

"We have to be able to take this back if you for some reason don't make your payments or fulfill your obligations," Shahadi said.

The development group also requested a six-year property tax abatement.

"We think this will work, but it's not a slam dunk returnwise," Nolan explained.

Because the site is in a tax increment financing district, it would need to be removed from that district with the agreement of the taxing entities.

Authority members said they could pursue and support that effort but that it would not be guaranteed.

After the meeting, Shahadi said, "We've made our offer and now we'll have to see what they do with it."

The project would fit into the 1.29-acre, L-shaped property that is owned by the authority within the square block.

If the project proves successful, Nolan said, the group would look at acquiring the two privately held properties within the square block to perhaps build a sister hotel.

The authority had heard another proposal for the site last week by Howard Raskin, a local developer. His plan was for an upscale 200-room hotel that likely would have been under the Westin or Hyatt brands.

Raskin's $38.8 million proposal would have encompassed the square block and included structured parking and restaurant and retail space.

The site of the former City Hall is also targeted for a hotel, but the city is not yet soliciting proposals for it.

Brian Barber 581-8322 brian.barber@tulsaworld.com

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