MIDLAND CITY COUNCIL APPROVES DEVELOPMENT AGREEMENT FOR DOWNTOWN HOTEL

Credit: City of Midland

MIDLAND, TEXAS -- The Midland City Council voted on Tuesday (January 23, 2024) to approve the city’s and Midland Development Corporation’s participation in a transformational downtown project.  

City leaders approved participation in the Hotel Santa Rita project that includes $125 million in private funds from the Midland Downtown Renaissance, LP.  

Hotel Santa Rita will deliver a minimum of 135-rooms, full-service hotel that includes 8,000-10,000 square feet of meeting space, retail and restaurant locations and an 800-space parking garage, of which 25% of spaces are reserved for public and other business usage downtown.   

Hotel Santa Rita will complement the investments of $42 million to the Bush Convention Center and $22 million to Centennial Park along Texas Avenue.  

Project benefits include:  

- Economic boost and vibrancy  

- Tourism magnet and revenue boost

- Property value uplift and urban renewal  

- Conference and event hosting  

- Quality-of-life enhancement  

- Sound financial investment  

- Quality-of-life synergy  

- Best practice alignment with other properties throughout the state   

Hotel Santa Rita will provide another strategic investment for downtown – the heartbeat of Midland – along with a recently re-created tax increment reinvestment zone (TIRZ), the entertainment overlay plan and the downtown master plan, which city leaders expect to align seamlessly and serve as a catalyst to the broader downtown vision.  

“At $67.3M per acre, downtown assessed value per acre is triple the value per acre 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, will make up around 35.6% of the estimated project cost, which is less than projects in Odessa (41%), Abilene (46%) and Dallas (100%), to name a few.  

The action by the Midland City Council and the Midland Development Corporation board will require Midland Downtown Renaissance to provide proof of financing by Dec. 31, 2027, and construct the four-star Hotel Santa Rita and parking facility.  

It approves Midland Development Corporation action that conveys MDC-owned land to MDR and establishes performance-based capital contribution of $45 million in 5 disbursements upon MDR’s completion of certain construction milestones.  

Council action also conveys City-owned land to MDR, abates Energas-owned improvements, capped at $250,000, provides certain performance-based tax rebates and fee waivers, applies for participation in State Convention Center Hotel program. The city’s investment will include $5 million in property tax rebates and $9.3 million in HOT rebates with another $1.1 million in other incentives, such as permitting fees and alleyway being vacated.  

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.