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The Proposed 525-room Publicly Financed Sheraton Convention
 Center Hotel In Downtown Tucson Rejected

The City Council Votes 7-0 to Kill the $190 million Project Outright

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

October 27, 2010 --Tucson's bid to build a downtown convention center hotel ended Tuesday as the City Council voted unanimously to kill the project outright.

The council voted 7-0 after a two-hour public hearing at the Tucson Convention Center attended by nearly 500 people.

Council members said the $190 million convention center hotel didn't make sense, and they weren't willing to risk taxpayer money to make it happen. City taxpayers needed to back the bonds in order for the hotel to be constructed.

Councilwoman Regina Romero made the motion that "because of financial considerations," the city will not proceed with funding of the 525-room publicly financed Sheraton hotel and will terminate the negotiations with hotel developer Garfield Traub. Romero also said the city will proceed with negotiations with the new Rio Nuevo Board on projects that make economic sense.

The remaining crowd of about 150 people cheered after the council's vote.

"I, in good conscience, cannot move forward with this project," Romero said.

Only Mayor Bob Walkup proposed something other than rejecting the hotel. He tried to delay terminating the hotel project to give the negotiation process more time, and then he tried to get the council to vote on a Plan B for what to do next, which it rejected. Walkup eventually voted with the rest of the council against the project.

Councilman Steve Kozachik, by far the council's biggest hotel critic, said, "I suspect there's not a lot of people who don't know how I feel on this."

The remaining crowd cheered.

Councilwoman Karin Uhlich said "public sentiment is quite clear" and that the "project is not meeting the common-sense test."

Opponents and supporters of the hotel got about equal cheers from the crowd. By the end of the meeting, most of the supporters had left.

About 80 percent of the speakers were against the hotel, while 20 percent supported its construction. There were about 30 speakers in all.

Union members supporting the hotel waved signs that read "Keep good jobs in Tucson" and "If you build it, they will come." Opponents carried signs that said "Hotel to nowhere" and "Don't bankrupt the city."

The developer and the city never agreed on a final guaranteed maximum price for the project.

The previous total guaranteed that the maximum price for the hotel, the renovation of the Tucson Convention Center and a new parking garage would be $258 million.

In the days leading up to the meeting, Garfield Traub, hotel operator Starwood and the city traded letters over the guaranteed maximum price.

On Monday, Garfield Traub sent a letter to the city's outside attorney contending it could cut about $7.5 million from the guaranteed maximum price. On Tuesday, Starwood Hotels sent a letter to the city offering to put up an additional $10 million as a letter of credit to back up the city's bonds.

Mel Cohen, an outside lawyer hired by the city, sent a letter to the city contending that by his estimation, Garfield Traub's "proposed reductions are not adequate and others are available." Cohen said the reductions to the guaranteed maximum price should be in the range of $16 million to $20 million.

Walkup tried to get the council to either delay the vote and allow for more negotiations or give Garfield Traub an ultimatum to cut $20 million from its guaranteed maximum price or lose the ability to build the hotel.

Tony Traub, a co-owner of Garfield Traub, said during the public hearing that he would be willing to negotiate with the city's outside lawyer on lowering the hotel cost. The crowd groaned loudly when Traub contended it would be "virtually impossible" to spend city funds on the hotel. Members of the crowd heckled Garfield Traub's speakers until Walkup told them to stop.

Councilwoman Shirley Scott said the developers didn't compromise enough. "They keep coming down in inches; we need feet, yards."

Walkup was loudly jeered by the crowd when he tried to cut off the public hearing after one hour, when there were still nearly 10 people who had signed up to speak.

Steve Hughes got up and started shouting his comments to the crowd after Walkup said no one else could speak.

Hughes, an online-marketing director, shouted that the Phoenix convention hotel was a failure. The meeting stopped as he yelled his comments.

After Walkup told him he still couldn't speak, Hughes shouted: "You are my employee. You need to remember that."

Walkup agreed to extend the public hearing after Scott asked him to let the remaining speakers be heard. The crowd then applauded.

Contact reporter Rob O'Dell at 573-4346 or


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