Tyler Council approves performance-based incentives for planned 140-room Blackstone Hotel downtown

The Tyler City Council on Aug. 27 approved a performance-based incentive package to support construction of a proposed 140-room Blackstone Hotel in downtown Tyler.
The council voted to authorize the city’s portion of a public-private partnership for the project after a staff presentation and consultant briefing that described the hotel as a catalytic downtown investment and outlined the proposed incentive structure.
City staff presented the Valencia Hotel Group proposal as a full-service, destination hotel with meeting and wedding space and an estimated private investment of roughly $47.7 million to $50 million. Consultant Trent Petty told the council the developer expects about 140 rooms, roughly 5,700 square feet of meeting space and an overall building area near 93,000 square feet.
Petty described the proposed incentive package as strictly performance-based. “If for some reason we don't make that, and this is a 100% performance based agreement. There's no cash coming out of the city whatsoever,” Petty said. He said the city’s maximum exposure across all incentive components would be approximately $11.4 million within 10 years and a hard cap at about $12 million if certain thresholds are not met within an 11-year window.
Valencia Hotel Group President and CEO Doyle Graham told the council his firm has studied Tyler and views the project as restoration of a historical luxury hotel brand. “We are really excited to be here,” Graham said. He said the company plans an elevated design including a rooftop ballroom and that the hotel would serve weddings, conferences and other events.
Councilmembers discussed timing and protections in the agreements. Petty said the package includes clawback provisions so that incentives paid to the developer must be returned if the project fails to meet contractual performance standards, absent force majeure events. He said the deal relies principally on future hotel/motel, sales and property tax revenues generated by the completed hotel.
The council moved, seconded and approved the item by voice vote. Councilmember Haney made the motion; Councilmember Nichols seconded. The clerk recorded the motion as carried.
The city’s agreements also contemplate coordinating support from Smith County and Tyler Junior College; Petty said both entities had indicated interest in considering complementary property-tax abatements or other participation. Petty estimated the project would create roughly 60 full-time jobs with payroll in the low millions annually and said multiplier effects could expand economic benefits in downtown over time.
The council action advances the project to the point where Valencia executives and the city will seek formal consideration from Smith County and Tyler Junior College boards for their respective participation.
The developer and several Valencia executives attended the meeting and addressed the council after the vote; Doyle Graham emphasized the company’s commitment to moving the project to construction once permits and third-party approvals are in place.