Downtown Tucson Heats Up as Hotel Reaches Milestone

Rendering AC Marriott Hotel Tucson
Rendering of future AC Hotel by Marriott Hotel in Downtown Tucson

This week the Tucson City Council signed off on a development agreement that makes it possible for a hotel development in downtown Tucson, the final approval needed to proceed with this private-public-partnership (P3) project.

The city agreed to give the developer nearly $6.7 million in tax abatements for the first eight years, while bringing Tucson a gain of $17 million in revenue during that same time.

Developer Scott Steiteler and partners will build the 8-story, 150-room AC Hotel by Marriott at 5th Avenue, between Broadway and Congress in downtown Tucson. The Rio Nuevo Board along with the City of Tucson have been working on this P3 project for many months and on Tuesday, the P3 hotel got its final go ahead from the City. The hotel will create 220 new jobs downtown and more than 220 construction jobs plus multipliers.

The developer behind Proper, Diablo Burger, Hub, Sparkroot, Playground and other popular locations downtown, Steitler has been a placemaker for downtown for some time, developing and promoting the downtown core as a truly urban destination that models the live, work, play ideal.

Perhaps downtown is coming of age. “We have the community behind it, the merchants want it, Rio Nuevo signed off on it two weeks ago and now the city,” Steitler said. “It’s a milestone for the city to get to this place.”

According to Rio Nuevo Chairman, Fletcher McCusker, “First and foremast is the brand, the AC Hotels. The Antonio Catalán brand founded in Madrid is such an extraordinary group of European hotels.  Marriott acquired the brand and looked at iconic American cities, known for their urban, European flair. Places like the Gaslamp Quarter in San Diego, New Orleans, and Miami. The fact that they site selected Tucson speaks volumes about how the world is viewing the revitalizing of our downtown.”

AC Hotels by Marriott was launched in 2011 through a joint venture between Marriott International and Spanish hotelier Antonio Catalán. For the first time in the company’s history, Marriott International was importing a hotel brand into the North American market.

“You import wine. You import commerce. Why can’t you import a hotel?” Brian King, global brand officer for Marriott Endorsed Brands said during a press roundtable at the Marriott’s GM conference.

The AC Hotel brand will open its first hotel in the U.S. at the Cotton Exchange Building in New Orleans this fall, less than two years after Marriott and AC Hotels formed a joint venture combining AC founder Antonio Catalán’s design aesthetic with Marriott’s global distribution system. Kansas City and Miami locations will quickly follow for early 2015 delivery.

AC Hotels by Marriott currently offers a portfolio of more than 72 hotels in Spain, Italy, Portugal and France. Inspired by the runways and fashion houses of Milan, the brand features simple, clean and crisp lines, marrying sophisticated European style with approachable design for a distinctly urban feel. A sleek and modern approach to design combined with unique elements which embody the character of each destination; growth plans for the brand include more than 30 hotels set to open within the next three years throughout the U.S. and Latin America.

There should be 300 AC Hotels across the brand’s entire portfolio within 10 years, King said.

Expansion in the U.S. will come from a mix of new builds and conversions with an average cost per key between $100,000 and $110,000, King said. AC Hotels serves guests looking for a sleeker, more chic experience in their select-service hotel stays. The brand’s public spaces will feature a bistro and bar, as well as a curated collection of locally sourced art that gives the vibe of a trendy art house or museum.

The brand complements the rise of Generation Y travelers perfectly, he said, noting the $35-billion market of younger business travelers who make three or more business trips a year.

While several boutique offerings have emerged in the space, what has been missing is a trusted offering from a global chain, King said. Several of Marriott’s competitors have tried in recent years, but those attempts have failed to gain traction—and, more importantly, scale.

The reason, King said, is because the art didn’t match the science. While those competitor brands might have been design-led, they lacked the sound operating models and returns to entice owners. AC Hotels by Marriott blends the two disciplines.

“We understand the science of the economics really well,” he said.

The result should be rapid adoption in the U.S. and the rest of the Americas as well, he said.

The private-public-partnership will add not only to the TIF District, the hotel will add significantly to the tax base and further put downtown Tucson on the map as a walkable, urban oasis.  It will attract other projects, international visitors, make the convention center more viable, create jobs and attract additional restaurant and retail activity. McCusker concluded, “This is huge for Tucson and an example of the kinds of partnerships required to finish the job downtown.” The hotel should break ground by the end of this year and construction should last 12 to 15 months.

For earlier story on Rio Nuevo approval of downtown hotel click here.

For the AC Hotel marketing brochure click here: ac hotels