On Tuesday, Jan. 23, the Midland City Council approved the city's and Midland Development Corporation's (MDC) involvement in the Hotel Santa Rita project, backed by $125 million in private funds from Midland Downtown Renaissance, LP.
The Hotel Santa Rita is positioned as a strategic investment for downtown Midland, complementing initiatives like the tax increment reinvestment zone (TIRZ), the entertainment overlay plan, and the downtown master plan. City leaders anticipate alignment with these plans, acting as a catalyst for the broader downtown vision.
Aligning with other investments, such as $42 million for the Bush Convention Center and $22 million for Centennial Park along Texas Avenue, the project aims to bring several benefits, including economic stimulation, increased tourism and revenue, property value enhancement, urban renewal, conference and event hosting capabilities, quality-of-life improvements, and sound financial investment.
The Hotel Santa Rita is proposed to feature a minimum of 135 rooms, a full-service hotel with 8,000-10,000 square feet of meeting space, retail and restaurant areas, and an 800-space parking garage. Notably, 25% of these parking spaces are reserved for public and business use in the downtown area.
Downtown's assessed value stands at $67.3 million per acre, tripling the value of any other part of the city, according to Parkhill. Midland's public investment, including the MDC contribution, property tax rebates, and sales tax rebates, constitutes approximately 35.6% of the estimated project cost, which is comparatively lower than similar projects in Odessa (41%), Abilene (46%), and Dallas (100%).
The City Council's decision necessitates Midland Downtown Renaissance to provide proof of financing by December 31, 2027, for the construction of the Hotel Santa Rita and associated parking facility. The approval includes actions by the Midland Development Corporation to convey MDC-owned land to Midland Downtown Renaissance and establish a performance-based capital contribution of $45 million based on construction milestones.
Furthermore, City action involves conveying City-owned land, abating Energas-owned improvements (capped at $250,000), providing performance-based tax rebates and fee waivers, and applying for participation in the State Convention Center Hotel program. The city's investment encompasses $5 million in property tax rebates, $9.3 million in HOT rebates, and an additional $1.1 million in incentives like permitting fees and vacating alleyways.
City authorities project a tax advantage of $25.3 million during the 10-year incentive span and an estimated $67 million in tax benefits over a 20-year period for all taxing entities.