“This evening the Tacoma City Council will consider approval of an agreement with K.S. Tacoma, L.P., the owners of The Sheraton Tacoma Hotel. K.S. Tacoma is a member of San Francisco-based Kimpton Hotel & Restaurant Group, Inc.K.S. Tacoma is planning to construct a five-story addition to the hotel on the existing hotel parking garage site, adjacent to the current hotel, with one or two levels of parking below. Small conference rooms and possible retail space are also included as part of the new wing.The Memorandum of Understanding which the Council is expected to vote on this evening, outlines the terms and conditions for the hotels 200-225-room expansion.The City will transfer title of the Sheraton Tacoma Hotel parking garage to the hotel, and seek approximately $3.7 million in HUD Section 108 funds to replace private financing for the $24.2 million addition. The new $3.7 million loan is in addition to an existing HUD loan of $4.5 million on the current hotel. The U.S. Department of Housing and Urban Development allows HUD cities to loan Section 108 funds for economic development purposes.The opening of the addition is expected to coincide with the opening of the new Tacoma Convention Center, which will be located one block away. The new $51 million convention center will be three times the size of the current convention center, formerly known as the Bicentennial Pavilion. It reportedly will accommodate conventions of up to 5,000 people.This shows real teamwork between the Sheraton and the City said Ray E. Corpuz, Jr., city manager for Tacoma. Our new regional convention center will bring visitors to Tacoma, and the Sheraton will be able to provide quality accommodations. Well continue to work closely with them to coordinate bookings and scheduling of events.Martha Anderson, Development Division manager for the City of Tacoma said the parking lot transfer of ownership benefits the Citys profit sharing arrangement with the hotel. She said the Citys participation in the hotels current loan brings a portion of the Sheratons profits, including those from parking fees, back to City coffers. With an additional 200 or more rooms, increased profit sharing is expected. Anderson said the City is hoping to see approximately $600,000 this year from the profit sharing arrangement.Obtaining title to the land where the new wing will be built also assists the hotel in obtaining the financing needed to build the addition, Anderson said.Council issuance of the Memorandum of Understanding is the first step in applying for the HUD loan, Anderson said. HUD reviews applications based on the financial capabilities of the firm, as well as the positive public impact the project would have.We are pleased to be a part of the economic growth in downtown Tacoma, said Michael Sanford, general manager of the Sheraton Tacoma Hotel. We intend to be among the pacesetters of our community to demonstrate our enthusiasm about the new spirit of Tacoma.Both the convention center and the Sheraton addition are expected to open in 2003.”
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