City of Midland releases proposed terms of downtown hotel development; seeks public input
Midland, TX – April 1, 2015 – (RealEstateRama) — The City of Midland has reached a set of proposed terms with developers of the Hotel Santa Rita, a mixed-use development that is proposed for a city-owned property in downtown Midland. The tentative agreement will be voted on by City Council members at their regularly scheduled meeting on April 14.
Meetings will be held for the City to receive public input at the following times in the Midland City Hall basement conference room (300 N. Loraine):
- 11:30 a.m. – 1 p.m. on Thursday, April 2
- 11:30 a.m. – 1 p.m. on Monday, April 6
- 5:30 p.m. – 7 p.m. on Thursday, April 9
Under the currently proposed terms, the hotel and its amenities will be funded by private developers. The total cost of the private investment by developers in the downtown property is expected to well exceed $70 million. In addition to this investment, the city has asked the developer to make a “good faith” deposit of $250,000 as an assurance of commitment to the project, and use commercially reasonable efforts to obtain local financing for the project.
Various public entities plan to invest an estimated $9.65 million in downtown, including improvements to Centennial Plaza, landscaping and infrastructure. Additionally, developers will receive the old County Courthouse property upon successful completion of the development.
Breakdown of public funding
The Midland Development Corporation, which is funded by a quarter-cent of Midland’s sales tax for economic development purposes, plans to invest up to $3.5 million in public infrastructure improvements, such as streets and sidewalks, utilities, drainage, and site improvements, in accordance with Chapter 501 of the Texas Local Government Code.
The City of Midland will sell the property to Midland Development Corporation at fair market value – an estimated $2.2 million – to be leased to the developers until the hotel is ready to open for business, at which point the property would be transferred to the Santa Rita Hotel. The City of Midland would use the funds from this sale, along with an estimated $1.8 million, to improve Centennial Plaza as it expands to provide a larger gathering space for community events, as well as additional landscaping. The proposed terms state that permitting fees for the project, which have an estimated value of $750,000, would be waived.
The Tax Increment Reinvestment Zone No. 1 will fund the demolition of the previous County Courthouse, which is expected to cost $1.4 million, to encourage future development of the property.
More about the project
Under the proposed plan, the 4-star boutique hotel have at least 120 rooms, a 5,000-square foot epicurean market, more than 7,000 square feet of meeting space, an undetermined amount of office space, multiple restaurants and lounges, a full-serve fitness center with spa services and parking facility with 359 spaces. The tentative terms that will be presented to City Council state that the developers of the project will be required to break ground by Oct. 31, 2016 and be completed by Aug. 31, 2018. The developers would also need to meet several deadlines regarding design documents and drawings and to secure financing in the 18 months following the signing of the agreement.
The Santa Rita Hotel would add additional property value to an area that has been exempt from taxation for several decades, and is expected to provide an impetus for additional development downtown. Council members voted on a resolution on March 24 to allow for additional public review and comment on the project beyond the original March 31 deadline that was set in December 2014 following a public presentation of the original plans.
To learn more and to stay updated on upcoming public meetings, please visit www.midlandtexas.gov.
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Media Contact: Public Information Officer Sara Bustilloz
