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Heavenly Hospitality LLC Wants to Build a Westin Hotel Across from the BOK Center
 in Downtown Tulsa; Seeks $10 million in tax Incentives
By Brian Barber, Tulsa World, Okla.McClatchy-Tribune Business News

Apr. 7, 2007 - An earlier proposal's controversial demands -- such as relocating the main bus terminal -- have been left out.

A developer who wants to build a Westin Hotel across from the BOK Center has returned to the negotiating table without the controversial demands made in his earlier proposal.

Gone is the requirement that the city relocate downtown's main bus terminal. Gone is the stipulation that two private properties be renovated or demolished. Gone is the mandate that the Centennial Walk be rerouted to pass by the hotel site.

But there still is one hitch.

The project would need $10 million in tax incentives from the city to move forward, said Larry Dalton of Arizona-based Heavenly Hospitality LLC.

"We believe in the revitalization of downtown Tulsa and want to be part of it," he said. "This would be a great project for us and for the city."

Dalton is calling on the Tulsa Development Authority to reissue a formal request for proposals on the property along Denver Avenue between Second and Third streets.

Tulsa's Economic Development and Real Estate Director Don Himelfarb said he's happy to see the developer has changed his mind on the demands.

But he said nothing should happen until city officials decide whether to move City Hall to One Technology Center, formerly the WilTel building.

That would free up the old City Hall as another potential hotel site near the arena and the Convention Center, Himelfarb said.

"It's a new day," he said. "If the City Hall deal goes through, we'll have a new set of facts to work with. We're in the middle of a process that could change the entire face of downtown."

City officials announced in March that they had entered into a 120-day purchase option with the owners of One Technology Center that is contingent on further study.

Dalton said that even if a hotel is built by another developer where City Hall is now located, it could coexist with his project.

His revised proposal is for a 200-room hotel with underground parking and a bit of retail and restaurant space.

Whether he could move forward with the residential component and extra commercial space contained in his original plan, which encompassed the entire city block, would depend on whether he could acquire the former site of the Towerview Apartments and an adjacent office building from their private owners.

"We no longer see that as a requirement to moving forward," he said. "We are talking to those owners, but we could proceed with just the property that is in the city's control."

Dalton had alluded in his initial proposal to incentives that would be needed but never before publicly stated an amount, although he said it has been discussed with city leaders.

The $10 million in tax incentives he is suggesting is based on $50,000 per room for 200 rooms, he said. The initial plan was to have 246 rooms, but city officials asked that to be scaled down to lessen the incentives.

The total cost of the hotel project would be $40 million, or $200,000 per room, Dalton said.

"The rule of thumb is for a $200,000-a-room hotel, you have to be able to charge $200 a night," he said.

"We can't justify that rate in Tulsa, but we could justify $150 or something around there, which is why we need help making up the difference."

Whatever restaurant and retail space that accompanies the development would end up paying for itself, Dalton said.

A hotel demand study presented last year to the city's Economic Development Commission indicated a financial feasibility gap that would have to be covered for a new hotel.

Himelfarb wouldn't say whether he thinks the city will have to provide tax incentives to eventually bring a new first-class, full-service hotel downtown.

"Some projects may need incentives and some may not," he said. "There's a process to determine that. This is government."

When the Tulsa Development Authority last year issued the first formal request for proposals on the L-shaped piece of property, valued at $1.6 million, Heavenly Hospitality's proposal was the only one submitted.

But the numerous demands that came with the proposal made it impossible for city officials to move forward with it.

Although he initially wouldn't budge, Dalton said a lot has happened since then.

The main sticking point seemed to be relocating the Denver Avenue bus station.

Dalton said the Westin executives he must answer to agreed the terminal would not be an issue as long as it was screened with tall landscaping and a physical barrier was created along the Third Street side.

Other concerns have taken care of themselves, he said.

The Coney Island Building has a new owner who plans to complete exterior renovations. The dilapidated Towerview Apartments have been demolished after a fire. And the trains that run through the area will be silenced because of new crossing gates being installed.

Considering all of the plans for downtown, including a talked-about baseball stadium, parks and other projects, the walkability of the area also won't be a problem that requires extending the Centennial Walk to the proposed hotel, Dalton said.

The only item on the list the developer still wants the city to assist with is talking to the owner of the nearby Wright Building about resurfacing the structure to improve its appearance.

"We're trying to put as few conditions on the deal as possible so something happens," he said.

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

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Copyright (c) 2007, Tulsa World, Okla.

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