The last piece to the jigsaw puzzle known as the AC Hotel Downtown Tucson has been put into place. 5 North 5^th Hotel LLC, (Scott Stiteler, manager) purchased the Bellovin & Karnas Law Firm building, at 131 East Broadway Blvd in downtown Tucson for $1.475 million ($213 PSF) for land value. The 6,916-square-feet lot will serve to square off the hotel site for a new 8-story, 150-room, AC Marriott Hotel at 5^th and Broadway.

“We could have built the hotel without this additional lot, on our L-Shaped property already owned; however, we made the decision one and a half year ago that a squared lot would be preferable and now we can proceed,” said Stiteler.

After much anticipation, the first hotel to be built in over 50 years in downtown Tucson is about to begin construction.

The sellers, Barry Bellovin and David Karnas, still occupy 131 E Broadway and will vacate May 31^st. Then the building will be demolished and should coincide with the archeological clearance being completed. With the City’s cooperation, ground breaking on this AC Hotel could begin as early as June, with the opening at the end of 2016, or early 2017, bringing 175 new jobs with it.

Stiteler told us the cooperation has been tremendous from the City of Tucson and Rio Nuevo thus far on this public-private partnership (P3) project that started July 2013.

With Phoenix leaders recognizing the city wasn’t meant to be in the hotel business and pondering how to cut losses and sell the Phoenix Sheraton Hotel. A sale would leave taxpayers on the hook for $300 million, with an underwater asset worth about $200 million, plus the $38 million in estimated losses over the past five years.

Tucson got this one right, with its approach of smaller boutique hotels scattered strategically across our downtown. Developers take the majority of risk in Tucson’s P3 project, with the District addressing parking and the City throwing in some HUD 108 gap financing as collateral in order to make it happen simply makes more sense and we have the Rio Nuevo District board to thank for this.

Mark Irvin, CCIM, SIOR, secretary of the Rio Nuevo District board had this to say, “Just do the math, the District will invest $4.3 million to the developer’s $47.3 million investment on the total mixed-use block project as Stiteler calls the project, and in the process the District assists with downtown getting a new hotel while the District gets a reasonable return on its investment.  The District has a goal that $1 of its investment be matched by $5 or $6 from others.  This definitely exceeds this with a 10 to 1 margin in this structure.  Perhaps some might say Phoenix created their own ‘Phoenix Nuevo’ with its Convention Hotel, which makes Tucson’s new approach look rather tame and candidly is a much more effective approach in comparison.”

Stiteler had just returned from the opening of another boutique hotel, 21C in downtown Durham, NC where he said, “You could visibly see the hotel enhancing efforts and energizing the downtown businesses with art, culture, education and a dining scene revitalization in Durham very similar to the revitalization Tucson has seen. Walking around the downtown district from the hotel in Durham, it was easy to see the impact our boutique hotel will also have in Tucson.”

Newly introduced to the U.S. and growth plans for the AC Hotel by Marriott brand is for more than 50 additional hotels set to open within the next three years. Stiteler told us he has attended the recent openings of AC New Orleans (Nov, 2014), AC Kansas City (March, 2015), and Washington DC at National Harbor (March 2015), with AC Miami (coming April 2015) and AC Chicago (May 2015).

AC Hotels by Marriott is a highly acclaimed urban lifestyle hotel brand that currently offers a portfolio of more than 72 hotels throughout Spain, Italy, Portugal, France and the United States. Originally founded in 1998 by renowned Spanish hotelier Antonio Catalan, it quickly became one of the most established hotel brands in Spain. Following its success in Europe, a joint venture was formed with Marriott International in 2011 launching AC Hotels by Marriott. AC Hotels was created for the design conscious traveler with an urban spirit looking for a cosmopolitan hotel experience. The brand boasts a fresh, stylish, urban design while creating a tailor-made guest experience, to make guests feel like they’re a part of their chosen destination. Premium touches balanced with comfortable service, each hotel is accessible to travelers looking to experience their destination in a stylish and easy way.

The 6-story AC Hotel on Tempe Lakefront has not yet broken ground, but plans were for ground breaking late 2014 or early 2015. Being two stories less and in a less constricted construction area, we can’t say whether or not the AC Hotel Tempe will finish ahead or behind the AC Hotel Tucson.

But we can say, let the competition begin!

Login for more information and refer to RED Comp #2759.

[mepr-show rules=”58038″]Sale date: 3/27/2015. Sale price: $1,475,000 with $725,000 down and balance financed with new conventional loan. APN: 117-036-197A[/mepr-show]

Looking up while at the corner of 5^th & Congress downtown you will now see tasteful, good-looking banners hanging from the light poles marking the spot where the new AC by Marriott Hotel is to be built downtown.

The much anticipated $32 million, eight story, 150-room boutique hotel at 5^th Avenue and Broadway will be one of the first ‘AC by Marriott’ branded hotels in the country and made possible through a public-private partnership (P3) with Rio Nuevo and the City of Tucson.

Scott Stiteler, the developer had the banners designed and installed at his expense to acknowledge the venture that reflects continued economic growth and increasing investments in the downtown area.

The ‘AC’ is named after Spanish hotelier Antonio Catalán who entered a joint venture with Marriott International. For the first time in the company’s history, Marriott International is importing a hotel brand into the North American market.

Lloyd Construction will be the General Contractor and Fors Architecture the architects for the Tucson project, scheduled to break ground in April, 2015 after the Tucson Gem Show.

On Friday, developer Scott Stiteler was tasked with signing documents with the Rio Nuevo District, making the Private-Public-Partnership (P3) agreement for an AC Hotel by Marriott in Downtown Tucson official. Mark Irvin, as Secretary, represented the Rio Nuevo District at the signing. Rio Nuevo buying the parking structure after it is constructed for leaseback to the hotel and the City’s tax abatement help to make the financing feasible.

Stiteler, the developer behind Proper, Diablo Burger, Hub, Sparkroot, Playground, Connect Coworking and other popular locations downtown 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 ideals.

With such a monumental event occurring in the Tucson business and real estate communities, the Stiteler team coordinated the attendance of appropriate elected officials and business leaders at the signing, such as City Council members Regina Romero, Richard Fimbres and Steve Kozachik and Mike Rankin, City Attorney. Rio Nuevo board members, Cody Ritchie, Jeff Hill and Mark Irvin were among the dignitaries present along with about 50 other ‘downtown supporters’ attending the signing ceremony. City of Tucson Mayor Jonathan Rothschild, Rio Nuevo Chairman, Fletcher McCusker and others who were unable to attend sent their regrets and acknowledgments of the historic event.

The $32 million, eight story, 150-room boutique hotel at 5^th Avenue and Broadway will be one of the first ‘AC by Marriott’ branded hotels in the country, a venture that reflects the continued economic growth and increasing investments in the downtown area. The ‘AC’ is named after Spanish hotelier Antonio Catalán who entered a joint venture with Marriott International. For the first time in the company’s history, Marriott International is importing a hotel brand into the North American market.

“I’m excited to have this hotel built right in the heart of Tucson’s downtown, surrounded by the restaurants and bars of the entertainment district,” said Stiteler. “The arts and theater, our remodeled convention center, the high-rise offices, student housing and, of course Sun Link, will all be steps away from this hip, stylish new hotel.”

Irvin added, “We believe the project will continue the welcome momentum of downtown and as several people have alluded, shows that change is never easy, not easy – but possible.”

Miguel Fuentevilla, architect of the project with Fors Architecture in Tucson, can already envision the hotel and talked about the anticipation of walking into the lobby of this beautiful hotel, being handed your hotel key, and making your way to the place that you will call home for the next few days. From the moment you enter the lobby and look out through the floor-to-ceiling windows, you’ll feel immersed in a cosmopolitan hotel with an urban vibe.

AC Hotels by Marriott is a European import, currently offered in 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 will embody the character of Tucson’s rich history.

The first AC Hotel New Orleans Bourbon / French Quarter area is scheduled to open next month, located in downtown New Orleans and only steps away from the French Quarter.