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Exclusive: New hotel planned near Austin Convention Center

White Lodging proposes project on part of site city has said it wants to acquire for a proposed expansion of Austin Convention Center.

White Lodging Services Corp., downtown Austin’s dominant hotel owner, plans to build yet another hotel in the central business district — this one on part of a site the city has said it wants to acquire for a proposed expansion of the Austin Convention Center.

White Lodging’s Deno Yiankes said the Merrillville, Ind.-based hotel development firm, in partnership with REI Real Estate Services of Indianapolis, has signed a long-term lease for the southern half of Block 8, which is just west of the Austin Convention Center.

Yiankes said details of the proposed hotel — including its size, room count, brand and construction timetable — are yet to be determined. However, he said it would be a major hotel that would cater to group and meeting business, though it wouldn’t be as large as the 1,012-room JW Marriott convention hotel that White Lodging opened this year at Congress Avenue and Second Street.

The half-block where the hotel is planned encompasses 0.81 acres bounded by Cesar Chavez Street to the south, Trinity Street to the east and San Jacinto Boulevard to the west. It currently is occupied by a scooter store, a Christian Science Reading Room and a former restaurant site, and it was being marketed for lease.

“We believe this site provides a unique opportunity to bring another first-class, convention-oriented hotel to the city,” said Yiankes, president and CEO of White Lodging’s investment and development division. “We look forward to working collaboratively with the city to ensure this project complements, and hopefully expedites, the proposed convention center expansion.”

City officials have said Austin is losing out on business because it lacks sufficient exhibit space at its convention center. Last year, the city notified several Block 8 property owners that their land was being sought for a public use — the first step in the acquisition process. That came after Lauraine Rizer, the city’s officer of real estate services, sent a memo to Austin City Council members saying that an expansion of the convention center could require the city to acquire three or even four downtown blocks. The memo suggested the city start by acquiring Block 8.

Rizer this week declined to discuss how White Lodging’s lease on Block 8 might affect the city’s convention center expansion plans. She said the city is in negotiations with a Block 8 property owner but declined to elaborate. She also wouldn’t comment on what other sites the city might be considering for the proposed expansion.

A consultant’s report on the proposed convention center expansion is expected to be presented to a City Council committee in August, before making its way to the full council, city spokeswoman Alicia Dean said.

Dean said the city will weigh all options before deciding whether or not to initiate legal condemnation proceedings of any private property, should it be needed for an expansion.

“The city always has that option, but we work hard to explore all other options before we get to that point,” Dean said. “Given this new development (with White Lodging) … it’s still too early to tell what the options would be moving forward.”

Yiankes said White Lodging hopes the proposed project will spur the city to solidify its plans for expanding the Austin Convention Center. White Lodging’s goal will be to develop the proposed hotel “in sync” with the city’s convention center expansion plans, he said.

White Lodging’s plans for a new hotel come amid a hospitality building boom downtown. White Lodging will open a new 366-room Westin hotel next week, and this week White Lodging is set to begin demolition and site work for a dual-branded hotel with an Aloft and Element in a single tower slated for Seventh Street and Congress Avenue.

The Westin’s opening will bring downtown’s room count to nearly 8,000 guest rooms, and additional projects that are planned or under construction will bump the total to about 11,000. Hotel Van Zandt, a 322-room hotel at Red River and Davis streets, is slated to open in late September. Construction also is under way on a 37-story Fairmont Hotel downtown that will add 1,066 rooms to the market when it opens in 2017.

Yiankes said that, despite White Lodging’s lease for the half-block, the city could still consider convention center expansion options to the north of White Lodging’s site.

“History shows that having a new convention center hotel open in conjunction with a convention center expansion will greatly enhance the pre-sales, marketing and ultimate success of the new convention space,” Yiankes said.

Danny Roth and Mike Wiley with Austin-based Southwest Strategies Group, the brokers who marketed the southern half of Block 8, said the property is one of the last prime redevelopment sites along Cesar Chavez. The site has no height restrictions, and it lies in an area experiencing tremendous growth, they said.

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