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Phoenix City Leaders Approve Sheraton Hotel Sale
Phoenix City Council members unanimously approved a $300 million cash deal to get the city out of the hotel business. The deal is expected to be finalized this June.
During Wednesday's city council meeting, staff told council members the offer was $25-50 million more than they expected to get. And, council members learned the city's loss would be more than previously reported.
Since opening the hotel in 2008, Chief Financial Officer Denise Olson told council members that the city has lost $29 million. It’s expected to cost another $3 million to close the deal and another $14 million to cover payments the city won't likely get.
“There are some instances where the city has fronted some monies in hopes to be repaid through operations of the hotel," Olson said. "We’re probably going to have to write those receivables off.”
In all, the city’s looking at a loss of just over $46 million.
“This also tells you and gives you an example of why government should never get into the business of something that’s none of their business," said District 6 Councilman Sal DiCiccio. "We should be funding streets, parks, things like that."
While DiCiccio got applause for criticizing the city’s role, Phoenix resident Brent Kleinman complimented the council for building a downtown hotel when no private developer would.
“Without this I don’t think the city would’ve progressed where we are in 2016," he said. "And, so I commend the leadership for taking that risk when you did.”
The sale to TLG Phoenix, an affiliate of a national investment firm, is expected to be finalized this June.