Arlington approves funding for new $550 million hotel near Live! by Loews
Developers at Loews Hotels and Co. and The Cordish Companies believe they can turn Arlington into a national hot spot for conventions and events by adding a new 888 room hotel and convention center and an apartment complex attached to Globe Life Park.
Loews Hotels will break ground on a new Arlington hotel in the city’s entertainment district, near Live! by Loews. The hotel developer will pay all costs up front, but Arlington will dish out $1 million to $1.5 million a year in performance-based tax rebates up to $25 million.
The Arlington city council Tuesday unanimously approved both the hotel and developments by the Cordish Companies.
The Cordish Companies will expand Texas Live!, the entertainment district build around the new Rangers stadium in a partnership with the team, and introduce a new apartment complex and office building.
Arlington City Manager Trey Yelverton said these projects will not lead to any new taxes since all funding will come from returning tax money collected from the developments.
The city can continue to provide performance-based tax rebates for 30 years after the hotel opens. The city will also provide a one-time grant of $10 million for part of the project.
The developer is investing all $550 million up front,Yelverton said.
Developers will begin construction in 2020 and finish in 2023.
The hotel is expected to attract new business to Arlington, according to a city document. The report says that the hotel will accommodate large group meetings, a market officials believe could have been worth up to $16 million in sales revenue between November 2018 and November 2019.
Yelverton said the biggest public investment into this project comes from upkeep of new parking garage facilities that will be created to make up for lost parking space. Parking facilities, along with the convention center, will be publicly owned and will be paid for in advance by Loews.
Maintenance for the publicly owned convention center and parking will be covered by $500,000 annually from the city for 30 years, set aside from hotel occupancy taxes, if the city council approves the project. Yelverton said that money is largely there for emergency needs.
Yelverton said the a lot of money the city will invest into these projects cannot be used on things like fixing potholes or addressing residential needs around the city. Investing the money into these tourist attractions will help the city earn more tax revenue to address those issues.
“Many cities are asked to bond fund hotels,” Yelverton said. “We’re not doing that. ... Instead of issuing bonds, private sector is doing that for us. We’re going to rebate them based on performance.”
The rebate on property taxes will be 50% annually, including taxes paid to the county and school district. The city will retain ownership of the land for the hotel.
Why does Arlington need another hotel?
Loews plans to include 888 rooms and 150,000 square feet of meeting, convention and exhibition space in the new hotel. With a sky bridge connecting the new hotel to the existing Live! by Loews, there will be nearly 1,200 rooms and more than 180,000 square feet of convention space “under one roof,” according to the city document. The cost comes out to about $619,000 per room.
Alexander Tisch, executive vice president for Loews Hotels, said the hotel will stop Arlington from losing business from events like future Super Bowls, World Series games or the Supercross dirt bike racing event which takes place once a year at AT&T Stadium.
A lot of hotel business for events in Arlington currently goes to nearby cities like Grapevine and Irving, Tisch said. By adding these rooms and convention spaces, Tisch said Arlington can become a national competitor for large group bookings.
“We believe that if you visit Arlington you should also be able to stay in Arlington,” Tisch said.
Reed Cordish, principal of the Cordish company, said the hotel is the best use of that land.
“We can bring to bear almost all the different divisions of the company into bringing this vision into a reality,” Cordish said. “That’s what we’re really talking about today when we talk about this site.”
Some of that exhibition space will come from the underground parking and tunnels of Globe Life Park, which this project will transform into convention, exhibition and meeting space.
The city also agreed to stop using the Arlington Convention Center, commonly known as the esports arena, for conventions once Loews’ convention center opens, Yelverton said. Esport, or video game, competitions will still be held in the arena.
Yelverton said this could lead to some employees at the convention center losing their jobs because of a lack of events to justify their employment. If that happens, he said, they will have the first chance to apply with Loews.
In return, Loews will agree not to pursue new developments in other parts of the region.
The city also believes the hotel will boost booking at AT&T Stadium, Globe Life Field and the city’s esports arena.
Tisch said people want to come to Arlington, even when there are no events, because of the entertainment district that already exists.
“Arlington really is an immersive destination,” Tisch said. “People who come to hotels for meetings want to be able to do things outside of their hotel at night.”
With Six Flags, the new Rangers Golf Club, the Cowboys, Rangers and Renegades sports teams and the events that come to the entertainment district, Tisch said Arlington has the ability to draw visitors to stay in the city if the hotel space is here.
Tisch said the development in Arlington is similar to the company’s development in Miami in the 1990s. Miami experienced an economic and tourism boom because of an influx of hotels and available accommodations, something he said Arlington can experience, too.
“We want to press our bet because we see a lot of similarities,” Tisch said.
“This (hotel) will change the way people think of travel and tourism in Arlington,” Tisch said.
The new convention center also will be a nice addition to Arlington’s entertainment district skyline, Tisch said.
Yelverton said at the city council’s afternoon work session that the hotel will likely be called “Loews Arlington” or “Loews Arlington, Tx.”
Loews opened its first Arlington hotel this year, Live! by Loews, connected to Texas Live! The company has similar projects in Miami, Philadelphia and Nashville, with another finishing development in Kansas City.
Apartments, parking, offices and more retail
The city will also foot an upfront grant of $11 million to The Cordish Company for expansions on Texas Live!, including a potential office building, and an apartment and retail complex.
The Cordish project incorporates the existing above ground structure of Globe Life Park, which the Rangers are leaving for the new Globe Life Field, with a new apartment and retail building attached to the ballpark-turned-Extreme Football League stadium. The apartments will be built at the intersection of Randol Mill Road and Nolan Ryan Expressway.
The apartments will also come with a parking structure fit to accommodate 1,900 vehicles, with 1,500 of those spaces being open to the public.
The office will be developed after anchor tenants have agreed to lease space in the building. Cordish said he has no doubt the office building will easily find tenants.
Cordish said his company also plans to open an office space called Spark, where start-ups and small companies can rent space in an open-space office setting shared with other organizations. Spark in Baltimore, which launched in 2016, incorporates available office spaces, as well.
Spark uses office space similar to popular companies WeWork or CommonGrounds Workplace.
Cordish said by bringing the new Loews hotel to the area, the city council allows the Cordish Companies to bring more offerings to the area.
Between the Loews and Cordish projects, the city expects more than $810 of private investment into the city, meaning the taxpayers will not be covering that $810 million.
This story was originally published December 17, 2019 at 8:12 AM.