For some reason, it appears that building hotels next to city convention centers is a honey pot for politicians. I am not sure why, but my guess is that they spend hundreds of millions or billions on a convention center based on some visitation promises. When those promises don’t pan out, politicians blame it on the lack of a hotel, and then use public money for a hotel. When that does not pan out, I am not sure what is next. Probably a sports stadium. Then light rail. Then, ? It just keeps going and going.
Finally, we may be at an end, though politicians are still hoping for some sort of solution that better hides what a sorry expenditure of tax money this really was.
Phoenix has entered into exclusive negotiations to sell the city-owned Sheraton Grand Phoenix downtown hotel — the largest hotel in Arizona — for $255 million.
The city signed a letter of intent with TLG Phoenix LLC, an investment company based in Florida, to accept the offer and negotiate a purchase contract, city officials announced Tuesday evening.
But the deal faces criticism from some council members concerned about the loss to taxpayers. The city also attempted, unsuccessfully, to sell the hotel to the same buyer for a higher price last year.
If Phoenix ultimately takes the offer, the city’s total losses on the taxpayer-funded Sheraton could exceed $100 million.
The city still owes $306 million on the hotel and likely would have to pay that off, even after a sale. That would come on top of about $47 million the city has sunk into the hotel, largely when bookings dropped due to the recession.
Now how did the city of Phoenix end up owning a hotel?
When Phoenix leaders opened the Sheraton in 2008, they proclaimed it would be a cornerstone of downtown’s comeback. They had one goal in mind: lure big conventions and tourism dollars. Officials argued the city needed the extra hotel beds to support its massive taxpayer-funded convention center a block away.
Fortunately, that can’t possibly happen here.