The City of Mesa has authorized its city manager to begin negotiating a development agreement for a new AC Hotel by Marriott. The proposed select-service property would rise five stories on the northeast corner of Main Street and Centennial Way, adding a branded hospitality option to this part of the city.
Plans call for an 85,000-square-foot hotel program with 150 guestrooms. In addition to the rooms, the concept includes an outdoor pool and a lounge that will serve both hotel guests and members of the public, positioning the space as an additional neighborhood gathering point. The project's development cost is projected at $39 million.
As part of the contemplated public-private structure, the City of Mesa would reimburse the developer for a portion of the construction sales taxes generated by the project. The authorization allows for reimbursement of up to $288,000, tying the level of support to actual construction activity rather than providing an upfront grant.
The draft deal terms also outline how parking would be handled over the long term. The developer would be required to license up to 100 parking spaces in a parking garage. Over the 50-year term of that parking license, the garage is projected to generate approximately $5 million in revenue, providing the city with a recurring income stream tied to the hotel's operations.
In addition to the local incentives, the project is expected to benefit from existing state law governing hotel property taxation. Under that law, the AC Hotel by Marriott development would be exempt from an estimated $2.1 million in property taxes. That exemption effectively reduces the long-term operating cost burden associated with the asset.
The combination of targeted local tax reimbursement, structured parking revenue, and state-level property tax relief outlines a framework under which the city and the developer share both the costs and benefits of bringing a new hotel to this prominent intersection in Mesa.
