PHOENIX-In a first step towards opening a 1,000-room, city-run hotel, Phoenix City Council plans to begin negotiating with three luxury hotel chains to operate an upscale facility at downtown’s expanded Civic Plaza.

Hilton, Marriott and Starwood/Sheraton are expected to begin working with city officials to structure a deal that will use the hotel’s revenues, and not taxpayer dollars, to pay for the project, part of the city’s $300-million downtown revitalization effort.

City officials are hoping to put together a plan that will allow Phoenix to pay for construction using project-financed revenue bonds issued through a non-profit agency linked to the city. Officials are hoping to pay back the bond debt with revenue from the hotel.

Neither the cost nor the location of the project has been decided, but officials say it would likely be opened by 2008, the same time the Civic Plaza is completed. The venture would place Phoenix among a select list of cities, including Sacramento, Houston, Denver and Chicago, that have gone into the hotel business.

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