New five-story hotel set for Downtown Mesa

The Mesa City Council voted at its July 27 meeting to approve a series of development deals and leases for the construction of a five story, 85,000-square-foot AC Hotel by Marriott at the northeast corner of Main Street and Centennial Way.

On a 7-0 vote, the council approved and authorized the city manager to execute a development agreement, Government Property Lease Excise Tax Agreement and a parking license agreement with OCAP Main St LLC.

The item was on the council’s consent agenda in which all matters are dealt with through one motion and vote.

“The project will generate significant private investment, expand Downtown Mesa’s hospitality offerings, create employment opportunities, improve public infrastructure, and strengthen Downtown Mesa’s ability to attract visitors, conferences and special events,” according to a staff report.

The proposed project consists of redevelopment of approximately 0.75 acres within the Town Center Redevelopment Area and the Central Business District. It will be adjacent to the Center Street Light Rail station and the city’s Hibbert parking garage.

The hotel will have 150 rooms, a minimum of 1,500 square feet of meeting space, a restaurant and lounge open to the public that consists of a minimum 2,000 square feet of indoor and outdoor space, and an outdoor pool.

The developer will provide sidewalk, landscaping and lighting improvements along Main Street and Centennial Way, as well as license 100 parking spaces within the Hibbert parking garage.

The Government Property Lease Excise Tax Agreement provides the project with an eight-year tax abatement of $2.1 million upon completion of all public and private improvements.

Under the GPLET agreement, the developer will convey the property and improvements to the city, and the city will then lease them back to the developer for eight years. At the end of the GPLET term, ownership of the improvements is conveyed back to the developer, according to the staff report.

The development agreement will provide a block of at least 10% of total guest rooms for major events that Mesa hosts, co-hosts, sponsors or partners.

The agreement also includes a provision of rental-free use of hotel meeting rooms by the city or city partners for two meetings per year or eight hours per year.

Among the economic benefits the town anticipates are:

• About $45 million in new private investment within downtown Mesa
• Projected $59.8 million in gross sales tax revenues to the city over 35 years
• Estimated visitor spending of $45 per day outside of the hotel, totaling $4 million annually after the third year of operations
• 290 construction jobs
• 50 permanent jobs
• Expanded lodging space supporting tourism, special events and Downtown Mesa businesses

Construction of the property is set to be concluded within 24 months.

Janet Perez can be reached at jperez@iniusa.org. Please send your comments about this article to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.