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]

Maracay Homes, D.R. Horton and Richmond American continued rolling options in metro Tucson area for a total of $1.66 million.

Maracay Homes took down 6-SFR lots more at Tortolita Vista for $1,015,673 ($169,279 per lot) in the Northwest submarket of Tucson. These were part of a 54-lot rolling option between Maracay and Ready Eight Corporation that started in September, 2013. With this takedown Maracay has 42-SFR lots in this community that are roughly one acre lots.

Will White and John Carroll of Land Advisors Organization in Tucson represented Maracay in the transaction. To learn more White and Carroll should be reached at 520.514.7454 and visit MaracayHomes.com for more information on this community.

For more details log in and see RED Comp #2788.

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D.R. Horton purchased more SFR lots at Mission Antigua in the western submarket of Tucson. This purchase was the third takedown for 8 finished lots of a 38-lot rolling option for $232,984 ($29,123 per lot) which will bring the subdivision to almost fully build out.

Dan Feig and Aaron Mendenhall of Chapman Lindsay in Tucson represented the seller, Antigua Associates, an affiliate of Red Point Development of Tucson, in the transaction. To learn more Feig and Mendenhall can be contacted at 520.747.4000 and visit D.R. Horton at Mission Antigua.

For more details log in and see RED Comp #2755.

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Richmond American Homes of Arizona, a subsidiary of MDC Holdlings, Inc. (NYSE: MDC), is buying 56-SFR lots at Madera Highlands Villages in the Town of Sahuarita and recently closed on the third takedown for five lots at $411,281 ($82,256 per lot). The roughly one-acre lots were originally developed by the Toll Brothers for luxury home construction and resold to MK Company Southwest of Scottsdale (Keith Holben, principal) during the market downturn. MK Company Southwest is the seller for the rolling option to Richmond American.

Will White and John Carroll of Land Advisors Organization in Tucson handled the transaction. To learn more White and Carroll should be reached at 520.514.7454 and visit Richmond American Homes

For more details log in and see RED Comp #2687.

A vacant warehouse with fenced yard at 450 N Grande Ave in Tucson’s west submarket sold recently for $280,000 ($72 PSF) to Ventana Capital Investments of Marana (Todd Spencer, manager). The 3,873-square-foot building on 1.38 acres had a grandfathered use with residential zoning. Located west of I-10 and southeast of St Mary’s and Grande Avenue, the property is close to I-10 and downtown Tucson, in the Rio Nuevo District and Santa Cruz Area Plan.

The buyer had to rezone the property for his plans, and between Phase I and II environmental reports and rezoning, it became a two year endeavor that ended with a successful purchase and Planned Area Development (PAD) zoning.

The redevelopment plan for the 1.38 acres is to develop a 23-space RV park and reposition a portion of the warehouse, keeping 2,400-square-feet, as a clubhouse. The project will be called Sentinel Peak RV Park, after the original name to A Mountain derived from its function as a lookout point. In 1915, fans of the U of A whitewashed a large “A” on its side to celebrate a victory, and the tradition has been kept up ever since. The permanent “A” is now red, white and blue, but A Mountain stuck.

With over 300 restaurants, shops and attractions within 3 minutes of Sentinel Peak RV Park, travelers can explore Tucson via the streetcar to iconic 4^th Avenue, Downtown, Tucson Convention Center, the University of Arizona, or take a hike up the peak to watch the sunset.

The project has broken ground and is expected to open this summer.

Gary Best, CCIM and John Hamner, CCIM with KW Commercial in Tucson handled the transaction for the seller, H&F Resources of Tucson (Richard Remaly, member). Sandy Teachout with Bidegain Realty of Tucson represented the buyer.

To learn more Best and Hamner can be contacted at 520.297.4545 and Teachout should be reached at 520.886.9877. Call Sentinental Peak RV Park at 520.495.0175.

For additional information log in and refer to RED Comp #2625.

[mepr-show rules=”58038″]Sale date: 2/13/2015. All cash. Buyer spent $105,000 for his portion of Phase I and Phase II and rezoning process, before having possession of property.[/mepr-show]