Do Not Disturb

The HVS study claims the hotel will begin its first year of operation, 2012, with a 52 percent occupancy rate before quickly rising to 68 percent in 2015, when the rate is expected to stabilize. The study also predicts the average room rate to rise each year, from $186 in 2012 to $250 in 2021.

Sanders says these assumptions don't accurately reflect the current hotel market, which he maintains is not stable, much like the economy. If these projections aren't met, he says the $50 million in reserves could evaporate quickly.

Norris cites a table included in the HVS study as an important analysis of Dallas' downtown hotel market that has been overlooked by the city. HVS included the top seven hotels in its research, which total 6,460 rooms or 2.4 million available room-nights per year. From 2002 to 2007, at least 1 million rooms were not filled each year, and the occupancy rate was just 54.3 percent in 2007. The addition of a 1,200-room hotel would add another 438,000 room-nights to the market—that amounts to 41 percent of the number of unoccupied rooms from 2007.

"It's pretty clear that the city doesn't think it's important for anyone to be asking them to do their homework," she says. "Understand the industry and do your homework before you make this substantial commitment."