Phoenix councilman: Hotel sale being done to keep Suns happy

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The Phoenix-owned Sheraton Hotel is finally starting to turn a profit just as the City is set to sell it off at a big loss. (Source: 3TV/CBS 5) The Phoenix-owned Sheraton Hotel is finally starting to turn a profit just as the City is set to sell it off at a big loss. (Source: 3TV/CBS 5)
Phoenix City Councilman Jim Waring says the sale is moving forward to help pay for an arena deal with the Phoenix Suns. (Source: 3TV/CBS 5) Phoenix City Councilman Jim Waring says the sale is moving forward to help pay for an arena deal with the Phoenix Suns. (Source: 3TV/CBS 5)
The City-owned hotel opened in 2008 as the recession began to take a toll and lost money for years. (Source: 3TV/CBS 5) The City-owned hotel opened in 2008 as the recession began to take a toll and lost money for years. (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

It's been a money pit for years.

But now, the Phoenix-owned Sheraton Hotel is finally starting to turn a profit just as the City is set to sell it off at a big loss.

[RELATED: Taxpayers could lose more than $200 million in Sheraton sale, councilman says]

Phoenix City Councilman Jim Waring says the sale is moving forward to help pay for an arena deal with the Phoenix Suns.

"Any return on investment, even if it's negative, is going back into an arena," Waring said Tuesday. "They need to sell the hotel before they can do anything else."

The City of Phoenix still owes $306 million on the Sheraton but is working on an agreement to unload it for $255 million to TLG Phoenix.

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

The City-owned hotel opened in 2008 as the recession began to take a toll and lost money for years.

However, times have turned and the Sheraton is finally starting to pay off.

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

A spokeswoman for the City Manager's Office confirmed Tuesday that the Sheraton turned a net profit of $14 million from 2015 to the present.

So why sell a city asset for a $50 million loss when it's finally making money?  

In an email, city spokeswoman Julie Watters said the profits were due to the fact Phoenix was only paying interest on the loan, not on the principal.

[MORE: Arizona politics]

But she warned that could change in a few years if the City is forced to make higher payments on the principal.

"If we sell it now, we avoid the significant principal payments in 3 years," Watters said in an email.

The City is expected to discuss the Sheraton sale next week in executive session, meaning it will happen behind closed doors.

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Dennis WlechVeteran political reporter Dennis Welch is a well-respected political expert in Arizona.

Dennis Welch
Political Editor

Before making the move to television, Welch wrote and edited for the Arizona Guardian, a highly influential online news site dedicated to Arizona politics and government where he served as owner and editor. During his Guardian days, Welch was a frequent guest on “Politics Unplugged” and has been a regular fixture on the state political landscape since 2005 appearing on numerous radio and television talk shows. “I am thrilled to start working with such a talented and dedicated staff of journalists,” said Welch. “This is a great opportunity to broaden the reach of my political coverage and tell stories that affect Arizona voters and their families.” With more than 13 years of experience under his belt, Welch’s arrival only strengthens 3TV’s commitment to providing first-rate political and government coverage across all platforms. When not covering politics, Welch is an avid runner and fronts a punk rock band that plays frequently throughout the Southwest and California. Welch is a well-respected political expert in Arizona and his addition means 3TV will provide a stronger, more robust political presence in Arizona. He joins 3TV from the Arizona Guardian, a highly influential online news site dedicated to Arizona politics and government where he served as owner and editor. During his Guardian days, Welch was a frequent guest on “Politics Unplugged” and has been a regular fixture on the state political landscape since 2005 appearing on numerous radio and television talk shows. “I am thrilled to start working with such a talented and dedicated staff of journalists,” said Welch. “This is a great opportunity to broaden the reach of my political coverage and tell stories that affect Arizona voters and their families.” With more than 13 years of experience under his belt, Welch’s arrival only strengthens 3TV’s commitment to providing first-rate political and government coverage across all platforms. When not covering politics, Welch is an avid runner and fronts a punk rock band that plays frequently throughout the Southwest and California.

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