Nephew to continue in Humberto Lopez's footsteps as head of HSL

Omar Mireles isn’t a “yes” man.

That’s according to his uncle Humberto S. Lopez, who recently ceded the presidency of Tucson-based, $800 million real estate giant HSL Properties to Mireles.

“He’ll come in and argue with me,” said Lopez, who co-founded HSL in 1975. “We’d get into very heated arguments and I’d get upset. But at the end, I’d give him a hug and a kiss. A lot of people, they say ‘yes’ to whatever you want, and he is not anything like that. I admire him for that.”

Lopez, 70, said his nephew has been acting as president for years now, and the official title is overdue. Lopez will remain chairman of the company’s board and will focus on philanthropy, he said.

And Mireles suspects that Lopez will never retire.

“Humberto is still very much engaged,” said Mireles, who until now has been HSL executive vice president since 2003. “I think this gives him a little flexibility to pick the projects he wants to get deeply involved with or not.”

LIKE A FATHER

Lopez has been like a father to Mireles, who moved from Nogales, Arizona, at age 10 to live with his uncle in Tucson. Lopez brought his nephew along to HSL business meetings and site tours of projects under development. Mireles proved himself to be astute and a hard worker from a young age, Lopez said. He was also a typical “mischievous” kid, throwing parties at his uncle’s house when the adults were out of town, Lopez recalled with a laugh.

Mireles attended Cornell University, then lived in New York City for five years — the whole time renting a 300-square-foot apartment on the Upper East Side for $1,200 a month. He worked for investment banking firm Donaldson, Lufkin & Jenrette until, in 2003, he returned to Tucson to join his uncle’s company.

“What haven’t I learned from him?” Mireles said. “Hard work, tenacity, integrity. One of the things he’s always said is you can never let down one of your creditors or investors. He’s a big believer that anybody who works hard and puts effort into it can make it.”

Armando Rios, who does consulting work for HSL’s philanthropic arm, the H.S. Lopez Family Foundation, said Lopez taught his nephew the importance of humility and morality.

“This is a man who grew up with nothing and earned his way to where he is at the hard way,” said Rios, who has been friends with Lopez for 20 years. “He’s grounded and has a strong moral compass. That has been a standard Omar has not only grown up in, but has practiced.”

HOTEL ARIZONA

Mireles will have to grapple with a mixed inheritance from Lopez, whose public image has been marred in recent years by local political battles centering on the shuttered Hotel Arizona.

The deteriorating Hotel Arizona has long been a sore spot for HSL, which has owned the downtown hotel since 1984. HSL and the city have never been able to agree on how much public support the company should get for renovating the hotel, located next to the Tucson Convention Center at 181 W. Broadway.

In 2010 Lopez launched a recall campaign against the then-city mayor, Bob Walkup, and Councilwomen Karin Uhlich and Regina Romero for fostering an atmosphere in Tucson that he felt was unfriendly to business. Lopez eventually abandoned the campaign.

When Lopez and HSL closed the hotel in 2012, a highly visible property in the middle of downtown was left vacant. Some council members saw the move as a hard-line bargaining tactic to gain leverage in negotiations and pressure the city to agree to HSL’s terms.

Mireles disputes that narrative. The hotel could not stay open in its deteriorated condition without city help, especially as occupancy rates were — and remain — low in the wake of the economic downturn, Mireles said. Still, he admits the conflict has had repercussions in HSL’s business dealings.

“I’m not gonna say it sullied his name, but certainly I think when we go to do some other projects around town, there’s always that question. It always comes up,” he said. “It has a story of its own.”

STILL UNRESOLVED

There’s no imminent resolution to the Hotel Arizona quandary. Councilman Steve Kozachik said HSL is still asking for tax breaks that aren’t a good deal for taxpayers.

“It’s in excess of what any of the other development teams have asked for and received downtown, both in terms of duration and percentage of subsidy,” he said.

The history between the City Council and Lopez has probably hindered negotiations between the two parties, Kozachik said. But a fresh start with Mireles could bode well for future dealings, he said.

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“It’s not going to mean we’re going to open up the piggy bank and give them whatever they want, but it at least gets that baggage out of the way,” Kozachik said.

Mireles said he feels urgency to reopen Hotel Arizona when the time is right. The company is bleeding $200,000 a year on the vacant hotel through property taxes, security expenses and insurance, he said.

But Arizona’s economic recovery has been slow compared to other states, and Mireles maintains that HSL needs greater city support for a revamped Hotel Arizona to thrive in Tucson’s “anemic” economy.

For now, HSL is focusing on the redevelopment of La Placita Village, on the same block as Hotel Arizona. A specific plan has been a long time coming, but Mireles said he’ll release details of a proposed mixed-use development at La Placita within six months. That would be two years after the date Mireles gave the Star in 2013, when asked about La Placita’s future.

EL CONQUISTADOR

HSL’s recent acquisition of the El Conquistador hotel and resort in Oro Valley stirred up another political dust storm.

A year ago, HSL bought El Conquistador for $15 million. It then broke off the country club and golf club operations and sold it to the town of Oro Valley for $1 million, to be funded by a half-cent increase in sales taxes. The town intends to turn the clubhouse into a community center and contract out the golf operations.

Opponents of the Oro Valley deal filed recall petitions against two Oro Valley Town Council members, and Mayor Satish Hiremath and Vice Mayor Lou Waters. The incumbents all won the recall election. Those leading the recall effort accused Lopez of buying off local politicians in order to saddle the town with a money-losing golf course, while HSL kept the hotel.

Mireles said he was “dismayed” by the allegations. HSL had been in negotiations with private parties when Oro Valley approached the company with a more modest offer, less than the appraised value of the golf club, he said.

“But we did see that Oro Valley was a good partner in the way that we knew the city would be interested in preserving those spaces, whereas a private party would be looking to maximize profits,” he said.

GROWING THE COMPANY

Mireles has overseen significant growth at HSL, including its expansion into the hotel market.

The company owns and runs 39 apartment complexes. HSL was busy acquiring multi-family properties in Phoenix in 2009 and 2010, when prices were low in the wake of the economic downturn, Mireles said. But as prices have bounced back in the multi-family sector, especially in Phoenix, HSL has turned its attention to the hospitality sector, acquiring hotels and resorts including the El Conquistador, Mireles said.

HSL is also finalizing the acquisition of another hotel — which Mireles said he can’t name yet — on the east side of Tucson.

The company is also wrapping up construction on its fourth luxury apartment complex in the Tucson region — the $46 million, 368-unit Encantada at Tucson National.

Next, Mireles will oversee another expansion at HSL, as the company embarks on a move executives have been contemplating for years: entering the third-party property management realm. Mireles said HSL is ready to capitalize off the knowledge gained from managing its own apartment buildings.

“We feel the time is right,” Mireles said. “As we’ve stabilized the projects we’ve acquired over the last five years or so, we feel we’re now in a position to put some effort into that third-party venture, and bring to bear the systems we’ve put into place for our own projects.”

HSL Properties has had its share of financial distress. Some of HSL's affiliated entities filed for Chapter 11 bankruptcy protection in the 1990s. The bankruptcies resulted from the savings and loan industry’s collapse, Lopez told the Star in 2006.

Still struggling in 2001, HSL Properties had Pima County’s largest tax delinquency, with $1.25 million in tax debts, according to a Star analysis of tax records.

Those debts are now paid down and HSL is up-to-date on its tax obligations, Mireles said.

Mireles echoes his uncle in attributing the company’s success to its close-knit staff.

“I cannot give them enough credit,” Mireles said. “It’s like a big family.”