Houston’s convention agency is poised to grant developers subsidies worth more than a third of the cost of a proposed luxury hotel atop its downtown headquarters, contrary to the original vision for the hotel and in contrast with industry norms, experts said.

The Houston First Corp. board on Thursday will consider whether to offer the developers of a proposed W Hotel its portion of an estimated $43 million in subsidies over 16 years. If that agency approves, the deal would go to Houston City Council, which would decide whether to grant the project property, sales and beverage tax breaks.

Houston First Chairman David Mincberg said subsidies were needed to make the deal for the “specialized, unique, five-star luxury hotel” work, and noted the scope of the incentive package mirrors the one granted to the Marriott Marquis seven years ago, though he acknowledged the deals are different. The Hilton-Americas, which opened in 2003 as the city’s first convention center hotel, was financed and is owned by the city.

“The Marriott was essential. This isn't essential in that same way. This is a final piece that allows us to compete and offer something unique and specialized to folks that are coming to the convention facilities,” Mincberg said. “It's seen as a piece of the jigsaw puzzle, to be able to offer something that is not currently available with direct access to the George R. Brown (Convention Center).”

Though Houston First’s original 2014 request for proposals stated that no local rebates or abatements would be offered in connection with the project and the original hotel proposal was much more modest, Mincberg said the agency has acted within its authority to let the deal evolve during negotiations.

Heywood Sanders, a public administration professor at the University of Texas at San Antonio who studies convention districts, said he does not see municipalities investing in luxury hotels as a means of boosting convention business. Luxury hotels being granted public subsidies in any circumstance, he added, “can happen on occasion, but it’s far from the norm.”

Mincberg said the 308-room hotel is aimed less at growing convention business — it is, after all, far smaller than the 1,000-room Marriott and the 1,200-room Hilton — than at boosting “sizzle” in the convention district.

Sanders questioned the logic behind that approach.

“The city has already gone into the hotel business with the Hilton and provided pretty substantial subsidies for the Marriott Marquis, as well as the public investment in the district. This is precisely the point where Houstonians should ask, ‘Why do we need to pour more public subsidies into this?’” he said. “What are the limits? Do you want to subsidize a luxury restaurant as you subsidize a W Hotel? Do you need a name brand chef next door, as well as a W brand?”

University of Houston economist Steven Craig echoed that, arguing the convention district’s growth should allow public subsidies to fall over time.

“If they’re trying to worry about niches in the convention business,” he said, “that suggests the business is developed and they should be able to build on their own.”

Texas Hospitality Partners would build, finance and operate the hotel, leasing the rights to build it atop the Partnership Tower, Houston First’s 10-story office building just north of the convention center.

Mayor Sylvester Turner, who appoints a majority of Houston’s First board, expressed no concern about the subsidies, saying they are consistent with the incentives given to the Marquis and other nearby hotels.

“My only interest is whether or not this is in the best interest of the city of Houston, and I’m sure that’s what Houston First is evaluating,” Turner said. “If it’s in the best interest of the city of Houston, we go forward. If it’s not, we don’t.”

The proposal’s lead local partner, Al Kashani — whose firm Horizon International Group will serve as the hotel project’s general contractor — is a campaign donor of the mayor and many council members, a member of the inaugural committee for the Jan. 2 launch of Turner’s second term, and has supported other mayoral causes.

Kashani declined to comment on the hotel proposal before it secured final approval.

Turner on Wednesday called questions about Kashani’s political support in connection with the hotel deal “unfair” and noted that Kashani had won the 2014 hotel procurement and begun negotiations with a prior Houston First regime before he was elected.

“Does it mean the deal is questionable because the guy gave to Mayor Annise Parker and Mayor Sylvester Turner? I don’t think so,” said Councilman Dave Martin, a non-voting member of the Houston First board. “I think you have to look at the merits of the deal. The mayor’s excited about a W in Houston. It’s a pretty hip hotel. But it’s got to be the right W. Let’s see what the financial package looks like.”

Nick Massad Jr., who developed the Embassy Suites and Hampton Inn-Homewood Suites near the George R. Brown and received much less generous public subsidies to do so than the proposed W would receive, said he supports the proposal.

“We do need additional hotels, particularly in the convention district, and I, frankly, think it’s appropriate to offer the incentives to get that done because the cost is so high to develop there,” said Massad, also a former chair of the Convention and Visitors Bureau.

Houston First manages more than 10 city-owned buildings, including the Hilton Americas-Houston hotel, the convention center, Jones Hall for the Performing Arts and Wortham Theater Center.

Reporters Jasper Scherer and Zach Despart contributed to this story.

mike.morris@chron.com