ARLINGTON, Texas — Read this story and more North Texas business news from our partners at the Dallas Business Journal
An independent hotel management company wants to transform a run-down former motel and used car shop in Arlington into a $54 million upscale hotel. The city is putting dollars down to help with the endeavor.
Division Hotel Management LLC, through a partnership with Valencia Hotel Group, would demolish the former Caravan Motel at 908 E. Division St. and the Dollar Car Sales property at 900 E. Division St. and develop a 145-key independent hotel called Caravan Court on 2.6 acres of land.
The appraised value of the existing properties, according to the city, is more than $1.6 million. Marty Wieder, executive director of the Arlington Economic Development Corp., said the hotel will cost $54 million to construct, up from a previous estimate of $45 million.
Arlington City Council voted unanimously June 25 in favor of providing $4 million to support the development of the hotel: $3 million to help with demolition and $1 million to support development for 10 years. The agreement will also provide performance-based rebates. No one spoke at the council meeting in opposition to the incentives or development.
If the boutique hotel is developed, the city estimates it will produce a $13 million financial impact over the course of the 15-year agreement, along with new tax revenue from hotel occupancy, property and sales taxes. Demolition would have to occur by Sept. 30 and the hotel would have to be developed by Dec. 31, 2026.
In an incentives quirk, the agreement requires the hotel to be operated by Citrus Hotels LLC under the brand Valencia but can't use any other geographic names beyond Arlington to describe the hotel's location.
Caravan Court will be designed as an updated "motor court" concept with mid-century design and plans to re-use the historic Caravan Motor Hotel sign located on the property, according to the city report.
Arlington City Manager Trey Yelverton said the old Caravan Motel is blighted. He hopes the new hotel will have a domino effect and encourage more development in the area.
"It had its heyday a long time ago but in recent years it's far from that," Yelverton said during a June 25 presentation to council. "It's time to facilitate the change."
The city has been trying to revitalize the Division Street corridor, where the former motel is located, for more than 20 years. One of the goals of the city's Division Corridor Plan, developed in 2000, was to attract new restaurants, shops and upscale entertainment to the street.
District 4 Council Member Andrew Piel said he's excited about the project.
"Division Street is ugly," he said. "And cracking the Division Street nut to reinvigorate and reinvent Division Street has been a big white whale that the city has been chasing for 25 to 30 years. Finally, we have a legitimate, well-funded, high quality product that hopefully will be the start of a new reinvention of Division Street over time."
Mahrouq Enterprises International Inc., owned by Sam Mahrouq, owns the land where the new hotel will be constructed, Yelverton said. He also owns several properties along the Division corridor, according to city presentation about the hotel development. The city approved a $7 million grant for Mahrouq's company, Ikon Technologies, to keep the business in town in exchange for identifying opportunities for Division Street's revitalization, among other requirements.
