Baptist Health proposes dual‑branded hotel; seeks roughly $21 million in city incentives

Baptist Health representatives on Monday outlined a proposed 15‑story dual‑branded hotel at 1051 Palm Avenue and asked the Downtown Investment Authority to consider a combination of revenue‑sharing and completion incentives that staff will take before the DIA board.

Steve Diebenow, representing Baptist’s development team, told the committee the project would total just over $100 million and comprise about 226 rooms split between an extended‑stay component and a boutique component, with a rooftop restaurant open to the public. He said the current package under consideration includes a $12.9 million rev grant (20‑year methodology) and an $8 million completion grant; the combined incentive in the current model is roughly $21 million.

Diebenow said Baptist will retain ownership of the land initially held as a nonprofit hospital asset but will transfer the hotel to a special purpose, for‑profit entity so the property will generate property taxes once converted. He added the hotel will be managed by an operator — Concord — rather than be branded as a Baptist facility. "This hotel will be managed by a group called Concord," Diebenow said, adding the manager has experience operating hotels adjacent to medical campuses.

Why it matters: the site is near major downtown hospital campuses and could provide lodging for families and visiting patients as well as general hotel demand. Council members focused on incentive structure (rev grant vs. completion grant), internal rates of return, whether loans could substitute for grants, and the timing of payments into the city’s budget.

Financial and timing details: Diebenow said an earlier application under the DIA tiers program sought a larger incentive mix (including a completion grant) that produced a higher internal rate of return; the current underwriting produces an estimated 10% IRR under DIA’s high‑rise policy. Baptist representatives said they must start construction by the end of 2026 under brand contractual terms and expect a 24–30 month build, with completion‑grant payments likely to fall in fiscal years around 2028–2030 depending on exact completion months.

Next steps and approvals: the Baptist team will appear before the DIA board on Jan. 21; any incentive approvals that involve general funds would then need city council review and approval. Tarbert said DIA staff will provide financial spreadsheets (including projected bed tax/bed‑tax receipts and other revenue projections) to the council auditor for review.

What the committee did not decide: committee members discussed and requested additional details but did not vote on incentives at Monday’s meeting. Diebenow said staff has looked at loan options but the forms that meaningfully change returns have proven complex; DIA will continue to evaluate permutations with its consultants.