A developer approached the Midland City Council on Tuesday about bringing a boutique hotel to the heart of the downtown area.
Brian DePalma of the DePalma Hotels, based in Dallas, approached the Midland City Council on Tuesday looking for incentives to help with a $25 million project that will bring a 93-room boutique hotel to the 100 block of South Loraine Street.
DePalma said the equity is raised – it is a privately funded project -- but that he wants the city to consider an incentive package that represents 16 percent of the total project budget. A hotel occupancy grant of $4 million would be paid out for approved expenditures , including:
- 100 percent of ad valorem taxes paid and “business personal property tax” for five years and then 75 percent over the following five years;
- A city sales tax rebate of 50 percent for seven years;
- A 50 percent city sales tax rebate having to do with construction and associated fees;
- The waiving of other impact, permit and review fees.
Developers are not seeking a cash incentive.
“We don’t need the cash,” DePalma said.
The hotel would be tentatively called “The Thomas” and would convert a building that the developer said was built in 1927, making it the “oldest high rise in West Texas.” The plan would include rehabilitation of a current building and construction of new rooms to bring the room total to 93.
The hotel would be a Hilton brand, like the current hotel downtown – The Double Tree by Hilton Hotel Midland Plaza. Developers also said it would be part of the Hilton’s “Tapestry” brand, which allows developers to “embrace the independent nature of a hotel.” Developers told the council they have been involved with 70 properties and have another 80 properties “in the pipeline.”
The hotel would have a restaurant that serves breakfast, lunch and dinner, some meeting spaces and valet parking. An average daily rate of $150 was expected in the beginning. DePalma said the hotel will not be a “big box convention hotel.”
DePalma stated that once developers receive approval for the project, construction could be completed within 24 months.
“Hilton calls me once a month, saying when do we start,” DePalma said.
Hotel particulars
“The Thomas”
Where: 100 block of South Loraine Street
Expected company: Hilton
Number of rooms: 93
Average room size: 300 square feet
Average cost per night: $150
Public ask: $4 million in abatements and rebates, no cash upfront
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