Austin’s Largest Downtown Marriott Could Start Construction in 2012

By Camelia Bulea, Associate Editor

A year ago it seemed that the 1,003-room hotel project was dead, but now it is very probable that construction will start in nine months. Upon completion it would be the largest downtown hotel in Austin.

The Congress Avenue Marriott, a 30-story hotel complex on Second Street and Congress Avenue, was one of the most controversial—and least popular—downtown projects when originally proposed in 2006. The project is best known for displacing Las Manitas, Austin’s favorite little downtown Mexican restaurant and other local businesses.

Now, the plan is once again up for discussion by the Austin City Council. The entire city of Austin would have a lot to gain from the construction of this Marriott as it would create 600 full-time jobs and generate more than $2 million in property tax and more than $4 million annually in lodging tax for the city.

Tim Finley, Las Manitas’ landlord, had once agreed to lease the restaurant site to White Lodging Services Inc., the developer of Marriott Hotel, but the deal was cancelled during the recession and at present Finley is said to be in negotiation with other hotel developers. According to representatives of the local tourism organizations, three or four developers have already announced the desire to fund such a project. At present, there is no information regarding the developer that could build the hotel project.

Before the hotel project was shelved, the budget at one point reached $250 million, but when it was launched the investment was reported to be $185 million. The original project plan included 1,000 rooms across three separate Marriott-branded hotels in one building. The last reported version included just one Marriott hotel with 1,000 rooms.

Austin is also an attractive destination for out-of-town hotel developers. A San Diego-based investor recently announced plans to build another $350 million hotel with 1,035 rooms in the Waller Creek area just east of the Austin Convention Center. This one would include 115,000 square feet of meeting and exhibit space, along with two restaurants and retail space.