In a 3-2 vote, the City Commission approved the sale of the city-owned Chevron and Johns parcels to the Valencia Development Corporation for $8 million.
Commissioner Jeremy Matlow and Commissioner Jack Porter voted against the sale.
Commissioner Jeremy Matlow expressed his concern about not seeking competitive bids according to city policy. He commented further, stating “it may be a great project, but it is not good business to go forward” without a competitive aspect.
Commissioner Curtis Richardson asserted that the sale to the Valencia group is a good opportunity which will bring jobs to Tallahassee. He said he “strongly supports” the sale of the parcels, adding that the hotels will be a “great addition to our community.”
Mayor Dailey was enthusiastic about the sale, noting it is a $125 million investment in Tallahassee, and that the business, university, and association communities are excited about this opportunity too, as the hotels promise to add exceptional meeting space.
At next weeks city commission meeting, elected officials will consider selling the Chevron and Johns parcels on W. Gaines Street to Valencia Development Corporation in the amount of $8,000,000 for the purpose of constructing two hotels, restaurants, and meeting spaces.
Valencia Development Corporation, based in Houston, Texas, operates the Valencia Hotel Group which is a hotel management company specializing in the development and operation of full-service luxury hotels.
In a letter to Tallahassee City Manager Reese Goad, Doyle Graham, the President and CEO of Valencia Development Corporation, stated that the group plans to brand the luxury hotel – with approximately 220 rooms – as Hotel Valencia Tallahassee or something similar.
The property would include two restaurants, a rooftop bar/restaurant, a resort style swimming pool and other amenities. The luxury hotel would also include a 10,000-12,000 sq. ft. grand ballroom.
A second hotel – the Courts Hotel – would include approximately 180 guest rooms.
According to meeting documents, the hotels would employ approximately 175 employees at Hotel Valencia and about 75 employees at the Courts hotel. There will be no minimum-wage jobs at either hotel.
Also, the developer states that they “encourage promotion within and there is a definite path from entry level staff positions to high-paying salaried management positions. All our current general managers were promoted up the ranks, usually from entry-level positions.”
On September 25, 2019, the City Commission authorized staff to release a Request for Proposals (RFP) for the sale of the two parcels. However, due to COVID-19, the RFP was not released. The sale of the parcels for hotel, restaurant and meeting space uses is consistent with the Downtown Plan, the Tallahassee-Leon County Comprehensive Plan, and the Gaines Street Revitalization Plan and further advances the City’s goal to create an 18-hour downtown.
Staff seeks approval for the sale to Valencia Development Corporation without competitive bid solicitation. Per city commission policy, surplus property shall be marketed for sale or disposition by competitive bid solicitation. However, real estate may be offered for sale without using competitive bid solicitation if the Commission deems the sale to be in the best interest of the City.
A value determination by a staff state-certified appraiser estimated the value of the property to be approximately $35 per square foot (or $7,700,000 to $7,800,000). A report from an independent state-certified appraiser in 2015 indicated a value conclusion of $30 per square foot (or $6,700,000). Given that the current offer exceeds the appraised value range, staff is seeking a deviation from the Real Estate Policy requiring a second appraisal.