Jun. 3, 2009--ARLINGTON -- A proposed Sheraton hotel and convention center expansion got an $8 million boost at the end of the legislative session when lawmakers passed a bill making the project eligible for a state sales tax refund.

Gov. Rick Perry signed House Bill 2032 into law Saturday, making cities with populations of 140,000 or more eligible for up to a 100 percent refund of the state's portion of the sales and use taxes and hotel occupancy taxes on convention center expansions. Eligible cities can use the money on hotel development projects and receive the refund for 10 years.

Arlington, with about 360,000 residents, was too small under a previous state tax statute to be eligible for such a refund. So the city lobbied lawmakers to reduce the size requirement.

The refund, along with other funding options, could provide incentives to Highgate Holdings for its proposed $55 million 300-room expansion at the Sheraton, city officials said. Arlington is also considering expanding its convention center and building a parking garage to help attract large state and regional conventions.

"It's money that could go a long way," convention center director Mark Wisness said. "It's a piece of the puzzle you really want to have available to you. It wouldn't kill [the proposed development], but it would make it significantly harder to do."

Previously, cities with at least 440,000 people were eligible for refunds. Fort Worth, Houston and San Antonio are already taking advantage of the statute. Dallas, whose voters just approved a taxpayer-funded hotel near its downtown convention center, is also eligible for the refund.

Arlington City Council members have begun reviewing the proposed development and discussing possible incentives in executive session. Wisness said it is premature to say whether the city's voters will be asked to help fund the hotel expansion.

"It's way too early. We're truly just in the discussion stage of the feasibility," Wisness said.

Mayor Robert Cluck agreed. He said council members will review the project in private for the next couple of months before making any public decisions on how much the city could support the expansion. "In no way is the city going to build a hotel. We're not going to be in the hotel business," Cluck said. He said that the city could issue bonds to help pay for infrastructure, like a parking garage, but that those decisions have not been made.

The hotel and convention center project, as proposed by Highgate Holdings last year, would cost $115 million.

The proposed expansion, which would include skywalks to attach the full-service hotel to the convention center, would make the Sheraton comparable in size with the 600-room Omni hotel in downtown Fort Worth.

This report includes material from the Star-Telegram archives.

SUSAN SCHROCK, 817-390-7639

-----

To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com.

Copyright (c) 2009, Fort Worth Star-Telegram, Texas

Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.