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Growing pains now a memory, Marriott breaks ground Tuesday

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YNN's John Salazar filed the above video report.

After years of community pushback and broken deals, city officials and hotel executives broke ground on the new 34-story J W Marriott in downtown Austin Tuesday evening.

The $275-million, 1.2 million square foot building will be on Congress Avenue flanked by Second and Third streets. Upon its completion, it will be downtown's biggest hotel with more than 1,000 rooms.

Among the speakers for Tuesday’s groundbreaking is Austin Mayor Lee Leffingwell. In June 2011, the mayor voted in favor of waiving $4 million in inspection and permitting fees for the hotel’s construction, with hopes the business would bring in hundreds of jobs to the local economy.

"The economic impact this year is actually expected to generate more than $26 million in taxes to the city of Austin every year," Leffingwell said during Tuesday’s groundbreaking.

However, Leffingwell was not always a fan of the project.

Three downtown staples fell victim to Marriott’s construction: childcare facility Escuelita del Alma, Tesoros, now located in the South Congress shopping district, and the well-loved Mexican eatery, Las Manitas.

In 2006, word spread businesses on the same city block needed to re-locate, the Austin community put up a resistance effort and called on city leaders to preserve local culture and tradition over a corporate hotel chain.

The city responded, even creating a Business Enhancement and Retention Fund to help Las Manitas relocate.

Leffingwell, along with fellow council member Mike Martinez and then-council member Brewster McCracken, wrote a letter to Mr. Marriott himself, asking the big-time hotel franchise to respect the iconic establishments that shape Austin’s traditions.

“It is a source of pride that these institutions have grown up locally and thrived on Congress Avenue, one of the most high-profile, historic streets in Texas. These businesses are—and they are representative of—what makes Austin a unique and special place,” the letter read. “Losing them is simply losing a proposition for everyone involved.”

The council also offered the owners of Las Manitas, sisters Cynthia and Lidia Perez, a $750,000 forgivable loan to reopen their business elsewhere. The Perez sisters declined, and later accepted a deal from the developers to move to the corner to Third and Congress. The restaurant never reopened after shutting its doors in 2008.

Cut to four years later, when the council—Leffingwell and Martinez included—put a stamp of approval offering tax breaks to the 85 year-old hotel corporation. The measure passed 5-2, with Kathie Tovo and Laura Morrison dissenting. The measure passed 5-2, with Kathie Tovo and Laura Morrison dissenting.

A chief player in the deal, White Lodging CEO Deno Yiankes, says developers did their best to keep those businesses alive.

"We're only as good as our neighbors, so this hotel has to be able to work with the community and that's why I joked and said, ‘You know it's been a long time coming,’" he said.

While the controversy surrounding the hotel’s fruition was poignant at the time, it’s now joined by dozens of other high-profile development projects on the calendar for downtown Austin.

Marriott officials say during the hotel's two year construction, more than 2,500 jobs are expected to be created. When it opens in 2015, 700 plus people will be employed.

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