Sugar Land Invites Developers to Enter P3 for Hotel/Convention Center Project
Feature Photo (above): The proposed hotel/convention center is to be constructed to the north (left in photo) of the Smart Financial Centre for the performing arts. Image: Google Streets.
by Adolfo Pesquera
Sugar Land (Fort Bend County) — The City of Sugar Land has called on private developers to submit a Statement of Interest for the construction of a hotel/convention center to be located adjacent to the Smart Financial Centre.
The second of two non-mandatory pre-proposal meetings will be held at noon Feb. 8 at City Hall, 2700 Town Square Boulevard North. The first pre-proposal meeting took place today.
Sugar Land aspires to secure an agreement with a developer to construct a 350-room, full-service, nationally branded hotel. The hotel must include a convention center with 50,000 square feet of meeting space. The project is to include a 700-space parking garage that will compensate for space lost since the existing site is a large surface parking lot that services Smart Financial Centre.
Public incentives, including tax rebates and other revenue sources, may be considered. During the 2017 session of the Texas Legislature, Sugar Land got a bill passed that gives the city rights to the state’s share of the hotel occupancy tax. The city tax incentives include the city’s ability to rebate its 7 percent HOT as well as the state’s HOT. In addition, the project is within Tax Increment Reinvestment Zone 4.
The proposed hotel and convention center site is on the opposite side of Smart Financial Centre from where Fluor Corporation plans to construct its new corporate campus. See: Future Fluor Corporate Campus Takes Shape.
The RSI was released Jan. 18 and responses are due by March 15.
Promotional brochure map for the Request for Statements of Interest. Courtesy: City of Sugar Land.
The city contribution includes a 10-acre allocation of land for the hotel/convention center and parking garage. Another 12 acres may be available if a particular proposal includes additional development that complements and helps ensure success of the project.
Any consideration of additional development should bear in mind that the city’s Visioning Task Force identified the 22-acre site as the location for a hotel/convention center and a community cultural arts venue. The timing of the community cultural arts venue has not been decided, but its goal is to focus on the visual arts and providing space for local artists to display their work, classroom space and/or incubator work space for the support of local artists.
The hotel/convention center concept has been a strategic component of Sugar Land’s plans for the long-term development of the city’s center. In 2014, a feasibility study was commissioned. The results of the study, which concluded in 2015, was that the parking lot north of Smart Financial Centre was the preferred of four sites that were considered.
Findings based on the target market concluded a 350-room hotel with a 50,000 square foot convention center was preferred. However, the prototypical meeting space for a 350-room hotel was 35,000 square feet. The study concluded that private development was not likely, given the projected hotel cash flow, to support the project without public incentives.
The 2015 project concept limited the hotel/convention center and parking to five acres, and included parking for 350 spaces–half of what is now envisioned. It included a 150-seat restaurant, lobby bar, pool and health club. The total project cost was put at more than $106 million, with $66.5 million of the total going to hard (construction) costs.
The 2014-2015 study by Strategic Advisory Group Inc. also noted that the Greater Houston region has an over abundance of hotel/convention center space which has led to high vacancy rates. But it also noted that new supply has historically been consumed within one to two years.
Sugar Land already as a hotel/convention center. The 300-room Marriott Sugar Land Town Square has 25,000 square feet of meeting space.
Adolfo Pesquera (Reporter/Editor) is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.