Caravan Court Hotel Project to Catalyze Division Street Redevelopment

June 26, 2024

The Arlington City Council has approved a redevelopment project for the former Caravan Motel property on the southeast corner Collins and Division Streets. Through a partnership with Valencia Hotel Group, Division Hotel Management, LLC will demolish the former motel site and adjacent Dollar Car Sales property, turning the combined properties into Caravan Court Hotel, a 145-room upper upscale boutique hotel. 

Valencia Hotel Group, a Houston-based boutique hotel developer with properties across Texas, will turn the old site into a unique luxury retro-style ‘motor court’ concept. Each of Valencia’s hotel products pay homage to the history and culture of their individual sites. Caravan Court’s mid-century aesthetic will nod to the historic Bankhead Highway through Arlington, including restoration and re-use of the iconic Caravan Motor Hotel sign.

The total project cost is estimated at $45 million, with the City providing a $3 million grant to assist with demolition and site preparation with annual performance-based rebates equal to the amount of taxes (City hotel occupancy tax, City sales tax and City property tax) generated by the project for ten years.

The City will provide an annual grant of up to $1 million to support the development for 10 years, which may be reduced if hotel occupancy tax performs better than current base-year projections. There will be no City-issued debt and no new or increased taxes. Demolition must be completed by September 30, 2024 and the hotel must be complete by December 31, 2026.

The agreement states that Division Hotel Management, LLC will assist the City in improving the aesthetics and function of the auto-related land uses in the Division Street Corridor. These efforts may include improving appearances of businesses and public spaces along Division Street, and relocation and consolidation efforts to create a used auto sales business park or auto mall, among others.

“Economic development isn’t a faucet, it’s a pump that requires creativity and deliberate effort,” said Gus Garcia, director of economic development for the City of Arlington. “This hotel will cater to the millions of visitors who flock to Arlington annually, generating significant economic benefits through increased hotel occupancy, a vibrant downtown and enhanced sales and hospitality tax revenue.”

The Caravan Court Hotel project will also bolster efforts to change land use in the Division Street Corridor and increase opportunities for connections between downtown Arlington and the Entertainment District, which has been a City policy objective for over 20 years.

“Caravan Court Hotel will help usher in a new era for the Division Street Corridor,” said Lyndsay Mitchell, director of strategic initiatives for the City of Arlington. “The City has been working on strategic redevelopment in the corridor for over two decades and this is one of the most exciting catalytic projects to come along - stitching together connections between Downtown and the Entertainment District while paying respect to the rich history and mid-century aesthetic of the Corridor.”