Phoenix may soon get out of the hotel business. Council members are scheduled to vote Wednesday on selling the Sheraton Grand Phoenix — at a lower price than originally expected.
Last year, a Florida-based company offered to buy the city-owned hotel for $300 million, but a few months later it backed out. Now, the same company, TLG Phoenix, is offering to pay $255 million.
Phoenix built the 1,000-room hotel downtown when the private sector would not. It opened during the height of the recession. The city owns the hotel and pays a management fee to Starwood Hotels and Resorts to operate.
According to a city council report, closing the deal is expected to cost the city about $40 million. Selling the Sheraton could also boost efforts for a new sports and entertainment arena. In 1992, Phoenix created a tourism sales tax to build the arena where the Suns and Mercury currently play and the city’s been using that money to cover losses from the Sheraton.
