To address the growing demand for hotels in downtown Midland, the Midland Development Corporation (MDC) approved the Tapestry Hotel project in a special meeting on Aug. 26.
The project is a new 34,000-square-foot hotel that will feature 80 rooms under the four-star Tapestry flag, focusing on hyper-local branding. Amenities will include an upscale restaurant and bar, fitness center, boardroom, business center, and market pantry. An addition to the building will also be included in the project.
“This building has a long history in Midland, and it will be very exciting to see it repurposed and given new life,” said MDC Executive Director Sara Harris during the meeting.
The property, originally constructed in 1927 as Midland's first high-rise hospital, was then used as an office building before LS Brentway purchased the property in 2019 with the goal of redeveloping the property into a hotel. LS Brentway is owned by the Borra family who own and operate hotels in the Permian Basin.
Harris said that local businesses have raised concerns about the lack of hotel options, which has hindered their ability to accommodate guests and visitors. "We lose significant amounts of tourism, conventions, and business travel to neighboring hotels because of the lack here in Midland," she said.
The Tapestry Hotel is backed by local stakeholders and is projected to generate $11 million in added tax revenue for taxpayers over the next 22 years, which includes two years of development and the first 20 years of operation. This financial return will primarily come from outside visitors and guests, significantly increasing the tax base for all Midland taxing entities. Currently, the property generates about $15,000 annually in revenue from property taxes alone.
The total cost of the project is estimated to be $26.6 million, which includes hard costs of $15.9 million, soft costs of $4.1 million, existing building and land valued at $3.7 million, and a 15% contingency of $2.8 million. The project will benefit from a robust incentive package, including a city property tax rebate and Hotel Occupancy Tax (HOT) rebate totaling $2.3 million, along with a $5 million MDC incentive, bringing the total incentive package to 27.71%.
Harris addressed concerns about funding for the project. “The MDC has a very healthy cash balance and is currently receiving well over a million dollars a month in sales tax revenue,” she said. “The MDC does have substantial commitments, and those are staged out over the next decade plus.”
Harris also provided an update on the Hotel Santa Rita at the meeting, another hotel project underway in downtown Midland featuring a brand new building with 135 rooms. The Tapestry Hotel project is expected to be completed before the Hotel Santa Rita.
Level 1 rendering - Midland Development Corporati