Taxpayers could lose more than $200 million in Sheraton sale, councilman says

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The City of Phoenix is in negotiations once again to sell the taxpayer-owned Sheraton Grand Phoenix Hotel. (Source: 3TV/CBS 5) The City of Phoenix is in negotiations once again to sell the taxpayer-owned Sheraton Grand Phoenix Hotel. (Source: 3TV/CBS 5)
One councilmember says the deal is a lot worse for taxpayers than it appears on the surface. (Source: 3TV/CBS 5) One councilmember says the deal is a lot worse for taxpayers than it appears on the surface. (Source: 3TV/CBS 5)
A Florida-based investment company called TLG Phoenix LLC has offered to buy the hotel for $255 million. The city paid $350M to build the 1,000-room hotel on Third Street near Van Buren. (Source: 3TV/CBS 5) A Florida-based investment company called TLG Phoenix LLC has offered to buy the hotel for $255 million. The city paid $350M to build the 1,000-room hotel on Third Street near Van Buren. (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

The City of Phoenix is in negotiations once again to sell the taxpayer-owned Sheraton Grand Phoenix Hotel, but one councilmember says the deal is a lot worse for taxpayers than it appears on the surface.

A Florida-based investment company called TLG Phoenix LLC has offered to buy the hotel for $255 million. The city paid $350 million to build the 1,000-room hotel on Third Street near Van Buren.

[ORIGINAL STORY: Deal to sell city-owned Sheraton Hotel may be fizzling]

On the surface, that’s about $100 million in red ink. However, Councilman Sal DiCiccio says the actual losses will be far more dramatic.

“The public was taken advantage of, and they’re being snookered in by this proposal,” DiCiccio said.

DiCiccio, a vocal opponent of the hotel, says TLG Phoenix wants about $63 million in incentives and tax breaks. If that figure is added to the $47 million in operating losses incurred by the hotel since it opened in 2008, he estimates taxpayers will lose more than $210 million on the Sheraton.

[READ MORE: Phoenix offered $300 million for downtown Sheraton (Feb. 2, 2016)]

Losses could go even higher, he said, with another $10 million in potential breakage fees and loan penalties that still have to be negotiated.

“These are taxpayer dollars. They are general fund dollars. They could have gone to the police to parks to libraries, but instead they went to cover a loss on a hotel,” he said.

[READ: City of Phoenix taking offers for Sheraton Grand Hotel (Feb. 1, 2016)]

In a Facebook post, DiCiccio said $210 million could have covered the cost for 1,555 new police officers. He sent a letter to the city manager Wednesday asking for an outside group to evaluate the deal and the potential tax breaks.

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Derek StaahlDerek Staahl is an Emmy Award-winning reporter and fill-in anchor who loves covering stories that matter most to Arizona families.

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Derek Staahl

This once-uncompromising "California guy" got his first taste of Arizona in 2015 while covering spring training baseball for his former station. The trip spanned just three days, but Derek quickly decided Phoenix should be his next address. He joined CBS 5 and 3TV four months later, in August 2015. Before packing his bags for the Valley of the Sun, Derek spent nearly four years at XETV in San Diego, where he was promoted to Weekend Anchor and Investigative Reporter. Derek chaired the Saturday and Sunday 10 p.m. newscasts, which regularly earned the station's highest ratings for a news program each week. Derek’s investigative reporting efforts into the Mayor Bob Filner scandal in 2013 sparked a "governance crisis" for the city of San Diego and was profiled by the region’s top newspaper. Derek broke into the news business at WKOW-TV in Madison, WI. He wrote, shot, edited, and presented stories during the week, and produced newscasts on the weekends. By the end of his stint, he was promoted to part-time anchor on WKOW’s sister station, WMSN. Derek was born in Los Angeles and was named the “Undergraduate Broadcast Journalism Student of the Year” in his graduating class at USC. He also played quads in the school’s famous drumline. When not reporting the news, Derek enjoys playing drumset, sand volleyball, and baseball.

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