Jan. 25, 2007 - MCALLEN -- Guests will start filing into the new McAllen Convention Center in less than two months, but finding a nearby place to stay won't be an option.

City officials had envisioned a six-story, four-star hotel on the 3 acres next to the convention center and the new Palms Crossing shopping center being developed.

But during more than a year of lobbying for a full-service marquee hotel for the site, only two hotels submitted proposals, both of which came up short of the City Commission's expectations.

Now, the city faces the possibility of having to give up more land for the hotel than it previously planned -- land it intended to use for future retail development.

The city rejected both proposals it received for 170-room hotels, one for a La Quinta Inn and Suites and one for a Four Points by Sheraton.

McAllen-based Tri-Vest Inc., the La Quinta developer, said it would be too expensive to build the six-story hotel the city envisioned. Tri-Vest instead proposed to distribute the 170 rooms across four stories, but the City Commission rejected that bid because it called for more land than the city had offered for the project.

San Antonio-based Presidian, on the other hand, wanted to pay $1 million for the land -- about half what the city had hoped to get.

"There is the question today whether McAllen can support a large, full-service hotel," said City Commissioner Jan Klinck, who has worked on the McAllen Convention Center project since it was conceived nearly a decade ago.

With two proposals already rejected, the city is now looking at opening another round of bidding. This time, though, it likely will offer more land for the project, allowing it to consider the four-story, 4.3-acre La Quinta plan.

In order to attract bidders, the city also likely will have to give up its hope for a full-service restaurant and some other amenities that a quality, big-city hotel would typically boast, Klinck said.

For now, the La Quinta project is the front runner, since it was the only proposal the City Commission seriously considered during the previous bidding process, Klinck said.

"We're hoping to turn this around quick," said Brent Branham, deputy city manager.

The city expects close bidding in about a month, he said.

Convention center staff members say they need a hotel at or near the site so they can book conventions at the venue, which should open March 23.

"Everybody wants to be within walking distance of the hotel," said Ernie Arredondo, assistant director of sales for the McAllen Convention and Visitors Bureau. "We need to have more hotels to go after these big conventions."

Hotels will become a bigger priority when the Palms Crossing shopping center opens in the fall and more foot traffic comes to the area.

A saving grace for the convention center should come by the end of the year, when a Homewood Suites by Hilton hotel is slated to open on the southwest corner of Expressway 83 and South Ware Road.

That hotel will have 100 rooms, which should alleviate some of the issues at the convention center.

Kyle Arnold covers business, the economy and general assignments for The Monitor. You can reach him at (956) 683-4410.

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Copyright (c) 2007, The Monitor, McAllen, Texas

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