City Manager: Hilton Garden Inn would bring a ‘domino effect’ in renewal of Granite Creek corridor
Questions remain over city leasing process
The expected end result – a revitalization of the Granite Creek corridor – appears to have support from all sides in the ongoing debate over plans for a new hotel on city-owned property.
How the City of Prescott gets to that point, however, continues to generate disagreement among some in the community.
During a Tuesday, Jan. 8, Prescott City Council study session, City Manager Michael Lamar and developers with WSH Hospitality, LLC, unveiled the extensive plans being proposed for the largely unused city property that lies near the corner of Sheldon and Montezuma streets in downtown Prescott.
Lamar maintains that the proposed Hilton Garden Inn project “is going to rejuvenate and revitalize the Sheldon and Montezuma and Granite Street corridor.”
Still, opposition continued to arise over the city’s process for leasing the 1.9 acres of public land to developers for $15,000 per year.
The deal would involve a 50-year lease, with one 30-year renewal option, as well as an option to purchase after the first 5 years, for $300,000. Questions continued to come up this week about whether the lease amount fairly represents the value of the land, and whether the city followed the proper procedure in choosing WSH Hospitality for the project.
At the heart of the city/developer vision is a 100-room Hilton Garden Inn – fronting the western section of Granite Creek Park, near the old railroad trestle.
The plans would go well beyond the hotel; surrounding it would be: a public splash pad and railroad-themed recreation area; an improved railroad trestle walkway; a public outdoor space that would house the Prescott Farmer’s Market and other community events; and a conference center at the historic Sam Hill Warehouse.
The city and developers would both contribute to the cost of the park improvements, say officials, although the total city amount has yet to be determined. Recreation Services Joe Baynes said a portion of the cost likely would be covered by the $581,000 that remains in the city’s park impact-fee fund (generated through fees on new home builders).
3D image of the property
Lamar led off the discussion by noting community partners had joined the city and the developers in creating the vision. Nearby property owners Prescott College and Arizona Public Service (APS) were central to the plans, he said, as were the Prescott Farmers Market, the Prescott Downtown Partnership, and the Granite Creek Corridor Revitalization Committee.
“It really is a domino effect of a bunch of community organizations – a positive domino effect by having private investment on public land,” Lamar said.
When the project was initially proposed to the City Council in August/September 2018, Lamar said not all of the “moving parts” had been confirmed. Since then, progress has occurred in a number of areas, including the developers’ pending purchase of the Sam Hill Warehouse from Prescott College, and the developers’ purchase of other nearby private property.
QUESTIONING THE PROCESS
Also since the last council discussion on the project, Lamar said the city had re-advertised the project to seek other developers who might be interested. “There was absolutely no other interest shown in this project,” he concluded.
Local resident Howard Mechanic disputed that claim, however, maintaining that the city’s subsequent re-noticing of the project was “a sham bidding process,” because it occurred after the city had already approved a development agreement with WSH Hospitality.
“This a great project – no question about it,” Mechanic said. “It’s a great project, but you’re blowing it.”
By selling the land to the developers at an under-valued price, Mechanic maintained, the city was violating the Arizona Constitution’s prohibition of gifting public property to private entities. “This is a gift to WSH,” he said.
City Attorney Jon Paladini disagreed. After the meeting, he emphasized that the property lies in the floodway, and therefore requires substantial extra costs to the developers. The cost of the hotel foundation alone would be about $700,000 he said.
The law also allows the city take economic development benefits into account, Paladini said, noting that the city would receive sales- and bed-tax revenue from the project.
Along with those who voiced opposition to the city’s process, the project also generated support from a number of speakers.
Prescott College President John Flicker told the council that he was “strongly in favor of this project,” noting that the college’s pending sale of the Sam Hill Warehouse to the developers and its subsequent purchase of the old APS substation project would “allow us to expand and connect our campus.”
Kathleen Yetman, executive director of the Prescott Farmers Market, added that the market was excited about the possibility of relocating to a spot near the creek and the Greenway Trails.
This week’s discussion did not involve a council vote, and Lamar said he expects the matter to be back on the council’s voting session agenda for Jan. 22.
Steve Shumway of WSH Hospitality said after the meeting that if the project proceeds as anticipated, construction could be underway by late April/early May, with completion projected by summer 2020.