Developers seeking city of Tucson's help to renovate shuttered Hotel Arizona downtown

Owners of a closed downtown hotel are again asking the city for financial support to reopen and remodel the site.

The Hotel Arizona, 181 W. Broadway, has been closed since 2012. Pueblo Center Partners LLC wants to reopen it as a 296-room Hyatt Regency with restaurants; a fitness center and spa; and more than 20,000 square feet of meeting and convention space, records filed with the city show.

Developers are asking for an eight-year Government Property Lease Excise Tax, or GPLET, which would abate property taxes.

In addition, they seek:

• 100% reimbursement of city construction sales taxes, capped at 2%.
• Reimbursement of 45% of the sales and bed taxes generated for three years after the certificate of occupancy has been issued.
• Reimbursement of 30% of the sales and bed taxes generated by the project for Years 4 through 8 after the certificate of occupancy has been issued.
• The use of reimbursements to cover the costs of public infrastructure improvements.

Construction costs are estimated at $45 million, city records show.

Owned by HSL Properties, this project has been before the mayor and City Council before for some financial backing, but consensus hasn’t been reached.

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“We have been pursuing options for this site for some time, although that might not be apparent to someone on the street,” said Omar Mireles, president of HSL. “We came up with the plan that we approached Hyatt on and they came down to see the property and are very interested.”

HSL is working with Hyatt on design plans, Mireles said.

He said he hopes the city will agree to ordering an economic-impact report, which is required prior to approving a GPLET. The report must show the economic benefit is greater to the city than to the developer.

The land immediately west of the hotel has been cleared for a future, unrelated project of which details are still being developed, Mireles said. If reopened, the hotel would be the fourth addition to lodging options downtown.

Construction is underway on the 170-room DoubleTree by Hilton, adjacent to the convention center.

Developers are also working on a dual-concept structure on Stone Avenue, between Ochoa and Corral streets, across the street from St. Augustine Cathedral.

A 75-room Hampton Inn and a 123-room Home2 Suites would be built in a six-story structure.