Just Checkin' In: Council's Gonna Begin Writing Those Big Hotel Checks Today

A.C. Gonzalez, who, when you glance at him real quick, kinda looks like Dean Stockwell in Blue Velvet

Among the many items under consideration by the city council this morning is addendum item 13, which authorizes $4.4 million in costs for the convention center hotel. When the item is likely approved (with Angela Hunt voting no and Mitchell Rasansky and Garcia conflicted), the City of Dallas will enter into a three-party agreement with itself -- Dallas Convention Center Hotel Development Corporation, the city’s local government corporation -- and Matthews Southwest for development of a convention center hotel on the $42 million tract of land the city bought from Chavez Properties.

Four million dollars will be spent on pre-developing the hotel, with the other $400,000 going toward geotechnical and environmental studies; the funds will be reimbursed with hotel revenue bonds. That is, unless a referendum derails the whole project or there’s a snafu in the negotiations between the city and Matthews. I’ll talk more about Crow Holdings’ efforts against the hotel in a future blog, as the second item poses more of an immediate threat to the hotel plans.

Although all indications so far are that the city and Matthews will come to a final agreement, obstacles still remain. “It’s still quite a ways from becoming reality,” A.C. Gonzalez, assistant city manager in charge of the hotel project, tells Unfair Park.

Because it’s a public project, Gonzalez says there are many rules the city must follow, and it is limited in the partnerships it can enter into without running into tax law issues.

The city has also decided on a $400 million budget for the project, meaning Matthews would have to kick in any additional funding for a larger project or potential cost overruns. “We’ve been real firm on that,” Gonzalez says.

Gonzalez stresses that even with rising construction and steel costs, the city has “put a stake in the ground” and declared that it will maintain its budget. “We believe that it is sufficient enough to get a good product in the way of a hotel,” he says.

Matthews and the city have both worked together to bring an iconic (or signature or whatever) project to the table, Gonzalez says, but Matthews needs to “bring more money to the table.” He adds that Matthews is making traction in bringing more funding into the mix and says things should start gelling with the project over the next couple months.

Another kink in the plan is the two operators in contention for the project -- Omni and Marriott, the only two interested -- disagree with the assessment from HVS Convention, Sports & Entertainment Facilities Consulting regarding the number of rooms, which it thought should be 1,200. Gonzalez says the city, HVS and the two operators will continue to meet in order to come up with a new room count, which he can’t see going lower than 1,000 or jumping up to 1,400. Finalizing this number, along with naming the operator, should take place within a month.

Gonzalez also tells us that Matthews’ ancillary development plan for the area surrounding the convention center hotel will be handled separately, with the first plans due in June.

We also wanted to get Gonzalez on record regarding the $60 to $80 million that the city will receive in state incentives for the hotel, just to make sure it wouldn’t find its way into Matthews’ hands. Gonzalez assured us that it wouldn’t. Fair enough, then. Just checkin’. --Sam Merten

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Sam Merten
Contact: Sam Merten