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Seven Developers Pitch Tucson for a Downtown Convention Hotel of
 Up to 700 rooms; Gaylord Hotels Makes a Surprise Proposal

By Rob O'Dell, The Arizona Daily Star, TucsonMcClatchy-Tribune Regional News

Jun. 2, 2007 - --The city hit the jackpot Friday as seven developers from across the country, with ties to many of the leading lodging chains, responded to the city's call for plans to build a convention center hotel to anchor Tucson's Downtown of the future.

Developers from as far away as Tennessee and Texas joined several locals in making a pitch to build a more-than-700-room hotel, which is being called the key to Downtown revitalization.

One plan included some lodging, but not a hotel.

Not only do city officials expect the hotel to draw more conventions to the area, they also expect it to be so profitable it will help pay off the new 12,300-seat arena planned nearby.

"It sounds like a pretty good turnout," said Carl Winston, director of San Diego State University's hospitality and tourism-management program, who was skeptical of the city's hotel plans when they were unveiled in April.

Winston said the key test will be what the exact proposals look like, and what kind of subsidy, if any, the hotel developers are looking for. The seven submissions were only concept proposals, from which three to five will be selected to submit formal bids.

But for now, he said, the city is on the right track.

Jaret Barr, the assistant to the city manager who is heading the selection process, said a yet-to-be-named five-member selection team will have to narrow the field because "seven is way too many" for formal bids.

The seven proposals include:

--The redevelopment of the Hotel Arizona by Phelps Development LLC, with Greeley, Colo.-based Hensel Phelps Construction Co., a leading builder of convention hotels and Hilton Hotels. This was the same plan pitched by Hotel Arizona owner Humberto S. Lopez and developer Roger Karber, although Karber and Lopez don't seem to be integral parts of the team, according to city officials who reviewed the plan. The plans call for a new 30-story tower to expand the hotel to more than 700 rooms and add a spa, retail stores, restaurants and convention/ballroom space. Karber was unavailable for comment.

--Downtown landowner Allan Norville is pitching a plan to develop all the publicly owned land between the Tucson Convention Center and Interstate 10, along with a portion of the land he owns in the same area. Norville would team with Marriott and Chris Ansley, the developer of the JW Marriott Starr Pass Resort & Spa. The plan includes offices, restaurants, parking, retail and a gem museum.

Norville said having the Marriott in "close proximity to Marriott Starr Pass is a tremendous advantage" because guests could be shuttled up to use that hotel's amenities, such as the golf courses.

--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, also pitched a comprehensive hotel-retail plan in the same area west of the TCC, including Norville's property. Norville said that although he negotiated with almost all the groups who submitted, he was "very, very, very surprised" a bidder he's not working with included his land. The group's hotel chain is Intercontinental Hotels, which owns the the Holiday Inn and Crowne Plaza brands.

--Local developer Bourn Partners submitted a bid without a hotel. It includes the redevelopment of nearby La Placita Village, plus the construction of retail, a movie theater and residential development in La Placita and on the public areas around Leo Rich Theater, the Music Hall and the TCC. Bourn representative Oscar Turner declined to comment.

--Gaylord Hotels is proposing its brand hotel in the public area near the TCC. It is also the only hotel operator to propose operating the TCC as well.

--Dallas-based Garfield Traub Development proposes a Sheraton hotel on the public land near the TCC and includes retail and parking areas as well.

--Faulkner USA, an Austin, Texas-based development firm, is proposing a hotel on the public land near the TCC that would be operated by Hyatt.

Winston, from San Diego State, said he was surprised by the inclusion of Intercontinental and Gaylord hotels.

Winston said Intercontinental is being aggressive in attempting to secure deals, and could very well attempt to put in money toward the deal in an attempt to secure the management contract.

He said the response from Gaylord is interesting because Gaylord typically builds huge convention hotels with 1,000 to 1,500 rooms or more. He said Gaylord has a very different strategy from many other chains.

Construction of the hotel, which would include convention and ballroom space, a spa, restaurants and retail shops, would be financed using the city's access to low-interest, tax-exempt financing. The debt would be paid off through a mix of the hotel's projected revenues, new sales taxes from businesses there and an additional bed tax, city officials said.

The city's Barr said the interest from developers was driven because there just aren't many locations throughout the country that include 40 acres in an an urban Downtown area next to a major highway. Add to that the dearth of hotel rooms Downtown, and you get high interest, Barr said.

--Phelps Development LLC/Hilton Hotels: expand the existing Hotel Arizona to more than 700 rooms with a new 30-story tower.

--Downtown landowner Allan Norville and JW Marriott Starr Pass Resort and Spa Developer Chris Ansley/Marriott: hotel, offices, restaurants, shopping and a gem museum in the area between the TCC and I-10.

--Southwest Value Partners, a real estate investment firm founded by Phoenix Suns owner Robert Sarver, and Park Place Mall owner General Growth/Intercontinental Hotels: hotel and retail development west of TCC.

--Bourn Partners: no hotel; redevelop La Placita Village.

--Gaylord Hotels: hotel west of the TCC, and the company takes over operating TCC.

--Dallas-based Garfield Traub Development/Sheraton: hotel and retail west of TCC.

--Faulkner USA, of Austin, Texas/Hyatt: hotel on public land near the TCC.

--Contact reporter Rob O'Dell at 573-4240 or rodell@azstarnet.com.

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To see more of The Arizona Daily Star, or to subscribe to the newspaper, go to http://www.azstarnet.com.

Copyright (c) 2007, The Arizona Daily Star, Tucson

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