Two agreements approved by Arlington City Council have the same ask: Help kick off beautification efforts along Division Street and revive the old Bankhead Highway.
The deals are separate — one a city development agreement to build a boutique hotelat the corner of Collins and Division streets, the other a performance agreement with the Arlington Economic Development Corporation for an office expansion in North Arlington.
However, both require local business owner and philanthropist Sam Mahrouq to work with the city and local business owners along Division Street to identify development opportunities and encourage businesses to invest in aesthetic improvements. City officials have for decades sought to revitalize the area, with little progress.
“Cracking the Division Street nut, to reinvigorate and reinvent Division Street, has been a great white whale that this city has been chasing for 25 to 30 years,” District 4 Council Member Andrew Piel said during a work session Wednesday afternoon.
The council approved both agreements in 7-0 votes. At-large council members Barbara Odom-Wesley and Bowie Hogg were absent.
Mahrouq has operated businesses along Division Street for 30 years. He said after the meeting that he wants to work towards a revitalized Division Street that meets the city’s vision and respects the street’s status — and history — as an auto sales corridor.
“It’s a good day for Arlington,” Mahrouq said. “I think it shows the Arlington City Council and citizens’ commitment to Arlington. Division Street has always been an automotive street, and it’s got a unique history. So, we want to work at developing the area while keeping that DNA.”
Redeveloping the iconic Caravan Motor Hotel
Once known as the Bankhead Highway, Division Street was part of one of the country’s first transcontinental highways — and home to much of the city’s early commercial developments. In addition to iconic restaurants and gambling spots like the infamous Top O’ Hill Terrace, the street was also once home to a row of car dealers known as the “Arlington Auto Aisle.”
Over the years, new auto dealerships moved away with the opening of Interstate 30, according to the Downtown Arlington Management Corporation.
One project included in the agreements would reimagine an iconic stop, the now-defunct Caravan Motor Hotel. The redevelopment would also take with it the Dollar Car Sales at the corner of Division and Collins streets. Under the agreements, the buildings will be demolished as early as Sept. 30.
The $45 million project seeks $3 million from the city for demolition costs to be issued prior to Oct. 1 along with an up to $1 million yearly performance incentive spanning 10 years. The incentive is based on city hotel occupancy, sales and property taxes.
Mahrouq, who owns both plots of land, has partnered with the Houston-based Valencia Hotel Group to oversee the hotel through Citrus Hotels, LLC.
Valencia’s involvement is a major factor in the council’s approval, City Manager Trey Yelverton said.
“That’s really important,” he said. “We want them to stay in this deal. And if they’re not going to be in this deal, we’re going to have to have a future conversation about that. So that’s a requirement.”
The new Caravan Motel will include 145 “upper upscale boutique” rooms with a mid-century design. The retro design is Valencia’s specialty and is seen in its other properties in Texas and California.
Arlington placed several requirements within the proposal, including the preservation of the historic Caravan Hotel sign and consultation with the Landmark Preservation Commission. The hotel must remain under Citrus’ ownership for the next 15 years.
Ownership will also be involved in the development of “corridor beautification along Division Street to improve the appearance businesses and associated public space, relocation and consolidation efforts to create a used auto sales business park or auto-mall, and other related efforts.”
Efforts to beautify the Division Street Corridor date back to the ’90s, with more recent efforts in 2000 and 2011.
Yelverton said the hotel would mark a major step towards connecting downtown with the entertainment district.
“As Front Street moves to the east and as the entertainment district moves to the west and Division Street is kind of in that corridor, this becomes the area to start connecting the dots,” Yelverton said.
The project received overwhelming support from council members and Mayor Jim Ross because of the lengthy efforts.
“It checks all the boxes,” Ross said. “It engages in a wonderfully philanthropic Arlington-grown businessman who has helped schools, universities, and our cultural district. It goes hand in hand with our desire to save important parts of our history and making sure that we acknowledge some of the beautiful parts of the past.”
Council Member and Deputy Mayor Pro-Tem Andrew Piel recounted a story about his daughter complaining that Arlington was “ugly.”
“It broke my heart as a fierce Arlington partisan,” he said. “We have a legitimate, well-funded, high-quality project that hopefully be the start of a new reinvention of Division Street over time. I count this as one of the most momentous and important things I’ve seen done while I’m on council. Finally, I can drive my daughter by and say, ‘Look, it ain’t ugly anymore.’”
Construction on the project must start before Dec. 31. The city hopes to open the hotel in time for the 2026 FIFA World Cup.
Separately, the city council approved a $7 million grant to Sam Mahrouq’s Ikon Technologies to expand their headquarters at 1161 Corporate Dr. The company, which provides IT support to auto dealers, employs 116 people and has annual revenues of $30 million. By 2026, it’s expected to bring in $150 million in revenue.
Under the agreement, the company will be required to keep its headquarters in town for 15 years and grow its number of employees to at least 266; provide at least $1.5 million in philanthropic support; engage with UT-Arlington about internship and employment opportunities for students and alumni; and stamp the words “Designed in Arlington, Texas” on its in-vehicle monitoring units.
The agreement also requires Ikon to assist with redevelopment efforts along the Division Street Corridor.
The grant would be disbursed by the end of the year.
The contract has a recapture provision if Ikon Technology breaches the agreement.
Yelverton said the agreement with Ikon fits the city’s goals: retaining and helping grow businesses, working towards redevelopment along Division Street and collaborating with UT Arlington.
“From a policy foundation perspective, it couldn’t be more crystal clear as it relates to the things about why we’re involved and interested in working on this,” he said.
Emmanuel Rivas Valenzuela is KERA’s summer 2024 SPJ news intern. Got a tip? Email Emmanuel Rivas Valenzuela at erivas@kera.org.
Got a tip? Email Kailey Broussard at kbroussard@kera.org. You can follow Kailey on Twitter @KaileyBroussard.
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