Construction ready to start on Queen Creek’s second hotel

Work is finally beginning on Queen Creek’s second hotel.

On Wednesday, a groundbreaking ceremony took place for the Homewood Suites by Hilton, located at the southwest corner of Ellsworth and Rittenhouse roads.

The hotel will have 124 rooms and is expected to open in November 2025.

It’s been more than two years since the town of Queen Creek agreed to sell more than 2.4 acres of town-owned land for the express purpose of building the hotel.

On June 1, 2022, the Queen Creek Town Council voted to approve the sale of the land to Tempe-based HD Management for more than $1.9 million.

At the time, construction of the hotel was expected to start around March 31, 2023, with a completion date set for on or before June 30, 2024.

Nirav Patel, president and CEO of HD Management, said the delay in beginning construction was due to difficulties in securing a loan.

He said during the COVID pandemic many banks with massive hospitality portfolios were seeing loan default rates of about 30%.

“These banks were told by upper management that until they cleared half the portfolio, they can’t ever lend in hospitality,” Patel said. “So, for three years they basically just shut all hospitality out and the only loans available were from predatory lenders.”

HD- Hospitality now has two loan offers to choose from.

“The only thing they’re lending on right now is industrial.” Patel said. “The only reason we got the two loans is because the Hampton Inn next door is doing well. And there are no other hotels in Queen Creek. If I didn’t have those two factors, I don’t think I would have gotten a loan.”

The town’s first hotel, the Hampton Inn Queen Creek at 20768 E. Maya Road, opened in December 2020 and contains 107 rooms. Before opening, the closest hotel to Queen Creek was the Hampton Inn & Suites Phoenix East Mesa in Gilbert.

Under the deal approved by the council in 2022, all costs of constructing the hotel will be the buyer’s responsibility, while the town will “underground the drainage on the site. This cost is estimated to be about $204,075. The town will also pay 50% of real estate closing costs which are estimated to be about $4,000,” according to a town staff report.

What the town gets in return will include one-time and ongoing revenues to the town’s operating budget.

“One-time revenues related to construction sales tax are estimated at approximately $600,000. One-time revenues for building permit fees, development impact fees and utility capacity fees are projected to be $615,000,” the report stated.

Patel said that ongoing revenues related to the town’s primary property tax are projected to be between $80,000 to $120,000, and sales tax collections directly related to the hotel are estimated at about $350,000 annually.

Along with the direct revenue the hotel will generate for the town, the new hotel will offer between 200-300 temporary construction jobs and up to 60 permanent full-time employees, Patel said.

We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org. Janet Perez can be reached at jperez@iniusa.org.