Arlington will get a third Loews hotel in its entertainment district under an agreement Arlington City Council approved Tuesday evening.
Council voted unanimously on the deal, which would require Loews Hotels and Company to build a hotel with more than 500 rooms; a convention center space that’s at least 25,000 square-feet; and restaurants and retail space.
The new hotel would replace the existing Sheraton Arlington Hotel, which was built in 1984. Loews acquired the property over the summer, The Dallas Morning News reported.
City Manager Trey Yelverton said the Sheraton is approaching obsolescence and the city could stand to attract more travelers who would otherwise go to Grand Prairie, Irving or other surrounding cities.
“The good news for us has been that we’re really doing well occupancy-wise in our major events,” Yelverton said. “But we could do better. If we had the infrastructure to support it, we would do better. We wouldn’t be providing the leakage of those resources elsewhere.”
The new space would also provide a parking garage and connections to neighboring Esports Stadium Arlington + Expo Center and the new home for the Arlington Museum of Art.
In return, the Loews-affiliated company Go for Three, LLC, will receive nearly $100 million in city and Arlington Economic Development Corporation (AEDC) grants and contributions, including:
- A $5 million contribution from the Arlington Economic Development Corporation (AEDC) for site improvements.
- A combined $35 million ($15 million from the AEDC and $20 million from the city) over the next several years for the parking garage.
- $38 million in grant payments from the city for the first 10 years of hotel occupancy, then $19.5 million for the following 15 years.
- Performance-based tax rebates equal to the amount of city taxes generated in the first 30 years based on hotel occupancy, mixed-beverage, sales and property taxes.
- Performance-based tax rebates equal to the amount of taxes generated in the first 10 years based on state sales and occupancy taxes.
The new hotel is expected to bring in $3.1 billion in economic impact over the next 30 years and $711 million in net benefits for the city, Tarrant County and Arlington Independent School District.
The company owns Texas Live! By Loews near Globe Life Field and is preparing to open the Loews Arlington Hotel – an 888-room hotel and convention center that connects to its other hotel – Feb. 13.
Yelverton said Loews’ newest Arlington project would mean the company will have invested over $1 billion in the city.
“There’s not many other companies in town that have bet on Arlington at that level,” Yelverton said.
Council members did not discuss the deal before their unanimous vote at the evening meeting, but they asked Yelverton questions about the agreement and affordability during the afternoon session.
Rebecca Boxall, District 5 council member, said she’ll watch for the design of the parking garage, which could be under construction by May. The current parking at the esports stadium means people parking for events access the building from behind.
The agreement bars the city from funding or incentivizing another hotel or meeting space project for at least three years from opening. Raul Gonzalez, District 2, asked how the stipulation would affect plans for major developments at Lincoln Square or Champions Plaza.
Yelverton said the city must obtain written permission from Loews to proceed, and that the city provided Loews with a list of forthcoming projects.
“I don’t expect that to be a concern for the ones that we’re talking about because of their limited scale,” he said.
Barbara Odom-Wesley, District 8, said she would like to see more affordable meeting spaces made available. She pointed to multiple Arlington organizations that have held events out of town because of a lack of affordable meeting options.
“As we move forward with all of this development, convention space, hotel space, upper upscale and everything that we’re talking about, I hope that we’re going to end up with some space that our local organizations, our nonprofits, can have their events, that something’s going to be affordable in Arlington,” Odom-Wesley said.
Yelverton said the city will manage the Esports Stadium and Expo Center's calendar to make event space more accessible at a lower cost than the forthcoming Loews convention spaces.
More hotel standards discussions
Arlington City Council stood divided on a possible policy change to city development standards for new hotels around Arlington Municipal Airport following spirited debate Tuesday afternoon.
Current standards do not allow for the construction of what are considered upper midscale, midscale or economy hotels unless an existing hotel that falls into one of the classifications is being rebuilt. The three definitions are the lowest classification of hotels, while hotels like Loews' third project are considered upper upscale.
A proposed policy change would allow for new upper midscale hotels around the airport, pending approval from city council. The change could mean more hotel capacity as the airport takes on more traffic from neighboring airports and new services in and around the airport, including the recently announced electric vehicle takeoff and landing program.
At the same time, the city and council are interested in encouraging high-quality developments that increase the average daily rate for hotel rooms. Council debated whether the change for the airport district would move the needle in that direction if they are opening up a lower rung of hotel offerings for developers.
Mayor Jim Ross said the proposal would increase the daily rate because it will not make building economy or midscale hotels easier.
“In fact, I’m a proponent of targeting ways to ensure that our midscale and economy hotels are changing how they’re looking at things and not renting by the hour,” Ross said.
Nikkie Hunter, council member whose district includes the airport, said she would not support the new policy because the area deserves quality hotels.
“These standards were put into place for a reason: we wanted to make sure we got quality hotels and developers, not just in the entertainment district, but all over,” she said. “You’re talking about my district, which is the airport. Are we to say that we don’t deserve quality hotels in the airport district? I guess that’s what I’m having trouble understanding.”
Gonzalez said successful redevelopments are rare with hotels. Luxury and upscale hotels that once existed in Arlington have shuttered or diminished in quality over the decades.
“I understand the mayor’s idea that we’re giving away dollars, but I don’t really care about those dollars going out there because I think we’ve got to go for the higher dollars," Gonzalez said.
Brent DeRaad, who heads the Arlington Convention and Visitors Bureau, said his agency supports the change.
Ross and five council members agreed to move forward the policy discussion and send the proposal to planning and zoning. Hunter, Gonzalez and District 7 Council Member Bowie Hogg did not opt to advance the proposal.
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