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Study Predicts Expanding the Tucson Convention Center and Building a Luxury Hotel,
at a Combined cost of $210 million, Would Add About $37 million a Year in
 New Revenue to Tucson's Economy

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

May 8, 2010 --Expanding the Tucson Convention Center and building a luxury hotel, at a combined cost of $210 million, would add about $37 million a year in new revenue to Tucson's economy, a report issued Friday by a Rio Nuevo consultant projects.

The outlook is based on both projects being done, even though members of the new Rio Nuevo board have been questioning for weeks whether there is enough money to even do just the hotel. The board is trying to determine if it can afford to issue bonds to build the $180 million Sheraton convention hotel, and if it can collect enough rent from the city for the TCC to cover bonds for that $31 million expansion.

The projections by Convention Sports and Leisure rely on a previous report done in February by HVS Convention, Sports, and Entertainment- which included "extraordinary assumptions" that all or most of the planned Rio Nuevo attractions must be built for the hotel to be profitable.

However, the city and Rio Nuevo have no money to build the museums, historic re-creations, science center, arena and much of the residential and commercial development that was planned.

The new report says it did not attempt to verify the HVS numbers and assumed they were correct.

Nearly $18 million in new money would come from the hotel and another $19 million would come from the expanded TCC for a total of $37 million in annual new economic impact, the report said. The $37 million would not flow into the area until the first stabilized year of occupancy for the hotel, which is projected to be about 2015.

The total economic impact from the upgraded facility is projected to be $64 million a year, including $27 million a year in economic impact from the existing TCC.

The report projects the new hotel and expanded TCC will bring in $1.3 million annually in new city tax revenue. Over the course of 30 years, the report said the hotel would generate $27 million in new taxes in today's dollars.

In addition, the report said there would be $12.7 million in personal income generated annual in Tucson by the hotel and expanded TCC, and there would be $70 million in one-time economic impact for the construction of the hotel and expanded convention center.

The new economic impact report is the second of three reports that will be used to decide whether to build the hotel through bonds issued by Rio Nuevo, bonds which would likely need to backed by city taxpayers. The first report was the HVS report and the final report on bonding and debt service is expected to be issued next week.

The report cost $26,500 and was paid for by the Rio Nuevo district, said Rio Nuevo Board Chair Jeff DiGregorio.

DiGregorio said he hadn't read the report, but said the numbers in the report are of huge importance to decide whether to build it.

"This is the biggest deal of all of the them," DiGregorio said. "It's looking at the long-term impact on the community."

Mayor Bob Walkup, a big supporter of the hotel, said he hadn't seen the report and couldn't comment.

Rio Nuevo Board member Alan Willenbrock said he expected the taxpayers to have to pay some sort of subsidy to pay for the hotel, so it's important to know the economic impact of that subsidy. Willenbrock said he's interested to discuss the report at length during an all-day retreat on the hotel

"For that dollar of taxpayer money, what kind of impact do you get?" Willenbrock asked. "It is the highest and best use to go to the hotel or should it go to roads ... parks or public safety?"

Contact reporter Rob O'Dell at 573-4346 or


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