From the Austin American-Statesman
http://www.statesman.com/business/content/business/stories/realestate/06/21/21marriott.html
HOTELS
Plans for Marriott complex revised
Two towers planned instead of three, developers say.
By Shonda Novak
AMERICAN-STATESMAN STAFF
Thursday, June 21, 2007
White Lodging Services Corp. has changed its plans for the downtown Marriott hotel project that has stirred controversy because it will displace the popular Las Manitas Avenue Cafe and a bilingual day care center.
White Lodging, which would develop, own and operate the hotels under a long-term agreement with Marriott International, still plans a 1,000-room project, but the new plans have two towers instead of three.
New plans call for a 31-story tower along Brazos Street with 850 guest rooms and an 11-story hotel along Congress Avenue with 150 rooms.
The larger Marriott will be a convention center hotel, and the smaller one will be a J.W. Marriott, the chain's upscale brand. White Lodging hopes to break ground in early 2008 and open the hotels in 2010.
The project will require a zoning change because it will be larger than rules allow. Similar requests routinely have been approved for other buildings along Congress Avenue, said Richard Suttle Jr., White Lodging's Austin attorney. The change will need approval from the Planning Commission, with final say coming from the City Council.
Initial plans called for a 26-story Marriott conventioncenter hotel with 650 rooms; an 11-story upscale Renaissance Hotel with 200 rooms; and a 15-story Springhill Suites with 150 rooms.
The project's "longer-than-anticipated delays" led to a re-evaluation of what type of hotels were needed to complement the nearby Austin Convention Center, said Deno Yiankes, president and chief executive officer of White Lodging's investments and development division.
The project's price is now an estimated $250 million, up from early projections of $185 million. The increase is mainly due to the addition of more full-service Marriott hotel brands, the addition of 40,000 more square feet of meeting and retail space, and overall rising construction costs, Yiankes said.
Randy McCaslin, a vice president with PKF Consulting, which tracks the hotel market, said the new lineup, particularly the additional meeting space, is a smart change.
McCaslin said his recent Austin market study found heightened demand not only for more high-end hotel rooms in downtown, but also for more meeting space because of projected growth in group and convention business.
And with a big name like Marriott behind it, "you've got national marketing power that you'll bring to Austin," enabling the city to attract bigger conventions.
The city's Design Commission is scheduled to get its first look at the project Monday. The advisory commission reviews projects and makes recommendations to other commissions and to the City Council, when requested.
The complex will include more than 85,000 square feet of meeting, retail and restaurant space, plus three levels of underground parking.
Plans are subject to change as the developer gets comments from various city boards, commissions and staff members, Suttle said.
White Lodging's development is one of seven hotel projects planned for downtown Austin that will add more than 2,000 rooms.
Other than gaming- and resort-driven projects in markets such as Las Vegas and Orlando, Fla., Yiankes said White Lodging is not aware of a similar convention hotel being built without significant incentives.
"This fact, along with the . . . additional developments completed and under way in the greater market, speaks volumes" about the company's bullishness on Austin, he said.
He said the project will position Austin "to compete more effectively on a regional and national basis for high-profile conventions."
The hotel is expected to add $7 million a year in tax revenue for the city.
This month, the City Council approved a $750,000 forgivable loan to help Las Manitas owners Lidia and Cynthia Perez move to another building they own on the same block as the planned Marriotts.
Council Member Brewster McCracken has said he voted for the loan to settle an impasse between White Lodging and the Perezes over access rights to an alley needed for the Marriott project. But Lee Leffingwell voted against the loan, saying he wasn't convinced that Marriott needed the Perezes' permission to build on part of the alley.
Suttle said White Lodging will seek approval from the City Council to close the alley to allow for ground-floor retail and restaurant space and meeting space above.
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