Development agreement OK’d for Hampton Inn, restaurants on 4.9 acres

The Hampton Inn & Suites by Hilton Phoenix/Gilbert. (2018 Hilton)

A Hampton Inn hotel and ancillary retail/restaurant uses are planned on 4.9 acres owned by the Town of Queen Creek on the southwest corner of Ellsworth and Rittenhouse Roads. The property is to be sold for $2.5 million.

The Queen Creek Town Council at a Dec. 5 meeting approved an agreement with Queen Creek Hospitality Group for development of the property.

It was approved 7-0 as part of a consent agenda.

Doreen Cott

The town in July 2017 issued a request for proposals for the development of land for a hotel user, an entertainment user and/or a high-density, mixed-use project in the Town Center, according to a memo to the council from Doreen Cott, the town’s economic development director.

Three proposals were submitted for the town’s consideration. After review of the proposals, the Town Council directed staff to enter into negotiations with HD Management for the purchase and development agreement for a hotel and ancillary retail/restaurant uses, she said in the memo.

On March 21 the council approved the purchase agreement with Queen Creek Hospitality Group. The agreement was signed and executed on April 18, Ms. Cott said.

“A first amendment to the purchase agreement was executed on Sept. 5 outlining that the close of escrow will be on or before Dec. 13. The purchase agreement outlined the terms for the purchase of the property and stipulated that the purchase is contingent upon an approved development agreement,” she said.

Development of the property will occur in two phases, Ms. Cott said.

The first phase is the development of a 107-room hotel, a 60,000-square-foot Hampton Inn, completed by Feb. 28, 2020. The second phase will consist of restaurant/retails uses, with no fast-food restaurants constructed, and be completed by Dec. 31, 2021, she said.

The purchase price for the 4.9 acres is $2,561,328, or $522,720 an acre, Ms. Cott said.

The first phase of the hotel development will result in one-time and ongoing revenues to the town’s operating budget, she said in the memo.

“One-time revenues related to construction sales tax are estimated at approximately $290,000. One-time revenues for development impact fees and utility capacity fees are projected to be $316,000. Ongoing revenues related to the town’s primary property tax are projected to be $30,000 and sales tax collections directly related to the hotel are estimated at approximately $80,000 annually,” she said.

Additionally, the hotel is expected to generate approximately $95,000 annually in transient lodging tax (“bed tax”) revenue.

Under state law, the bed tax is restricted for use on tourism and tourism-related activities, Ms. Cott said.

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