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Midland City Council approves Hotel Santa Rita project

The council voted five to two in favor of the project, which will receive a $15 million contribution from the city.

MIDLAND, Texas — Midland City Council voted 5-2 in favor of the Hotel Santa Rita project Tuesday, approving the project after hearing from over a dozen Midlander's who spoke during public comment.

The total project will cost approximately $170 million, with $125 million coming from private funds raised by Midland Downtown Renaissance, LP.

$45 million will also be contributed from Midland Development Corporation, which which will be dispersed via a performance-based incentive package after certain milestones have been completed.

An extra $10 million will come from the City of Midland by way of tax rebates and various incentives.

City officials expect a $25.3 million tax benefit over the 10-year incentive period, and more than $67 million in tax benefit over 20 years to all taxing entities.

Hotel Santa Rita will come with a minimum of 135 rooms with a parking garage of at least 800 spaces. Twenty-five percent of the spaces will be designated as public use.

Midland Mayor Lori Blong said this new hotel will not only revitalize Downtown Midland, but will also better utilize the other buildings in downtown. 

“We've invested around $60 million already into downtown Midland as a community. So to fail to produce a hotel that would that would help augment those facilities, were stranding that investment that we've already made," Mayor Blong said. "So the decision today is to make an additional investment that really helps to round out the utility of the Bush Convention Center and Centennial Park.”

The decision didn't come without debate, as many Midlanders stepped forward during public comment to either praise the project or list their concerns. Some Midlanders even called for the resignation of Mayor Blong alongside councilmen Scott Dufford and Dan Corrales.

Corrales was one of two city councilmembers to vote against the project alongside Councilwoman Robin Poole.

While Corrales did support a downtown hotel, he believed that the money that’s going towards the Hotel Santa Rita could be used elsewhere in the city or even for a different project.

Corrales also questioned why the taxpayer needed to be involved with the project.

“What I wasn't for and what the people I represent weren't for was the taxpayer being a partner in it. We had another hotel that was going to do it," Corrales said. "Maybe it wasn't the same hotel, but West Texas is a little difficult that way when it comes to, what do you use a taxpayer money for and why do I need to be a partner in it, if you have somebody else that can do it in the private market?"

Corrales also believed that, when the time comes, city council will have to be proactive in the future, especially when it comes to assisting the hotel.

“What are we going to do to help this project," Corrales said. "If you look at the traffic that’s going to be downtown and what this project will transform downtown into, what’s the next step after that? What kind of developments will have to come and what improvements do we have to make?”

City Councilman Jack Ladd was one member who voted in favor of the deal.

Ladd believes that not only will Midland reap financial benefits from the hotel, but new opportunities will come with it.

“People are going to want to take advantage of that and start their own businesses whether those restaurants or apparel, so we're gonna see immediate tax benefits from this," Ladd said. "Also, quality of life improvement, weddings and all kinds of events can now take place in Midland and we can say we have the premier hotel in West Texas, which we cannot say today.”

Tuesday's action will also require MDR, LP to require proof of financing by December 31, 2027 and to also build the Hotel Santa Rita itself.

If MDR, LP doesn't deliver on their part, the City of Midland have a way to back out of the deal without any losses.

“It requires them to deliver on the product before they receive compensation from the city. So there is no contribution from the city made to the project without them executing," Mayor Blong said. "So if there's any sort of default on that, then we have clawback provisions and so it costs the city nothing if they're not able to produce the hotel.”

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