MEMPHIS, Tenn. (WMC) - Dirt could be moving on the civic plaza in downtown Memphis within the year, as the city and the Downtown Memphis Commission just announced they’ve signed a development agreement with Loews Hotels to build a second convention center hotel.
Getting a second convention center hotel has been a priority of the Strickland administration. Plans call for it to be constructed directly across from Memphis City Hall and a stone’s throw from the soon-to-be fully renovated Memphis Convention Center.
“The good news for Memphis is this is exactly on target with what we need here in the city,” said Doug McGowen, Chief Operating Officer, City of Memphis.
Luxury brand Loews will be bringing a hotel to downtown Memphis, per a development deal Memphis Mayor Jim Strickland signed Thursday. The city has been in talks with Loews for months.
The development agreement calls for a high-rise hotel with more than 500 rooms, adding room inventory near the convention center. Renovations to the Memphis Convention Center to the tune of $200 million are already underway and should be complete this time next year.
City officials said Memphis is missing out on large conventions becuase of the lack of event and meeting space.
“Unlike some other communities that have built a very large convention center in hopes it will drive new business, we built our convention center to the demand we know exists,” McGowen said.
The hotel development carries a more than $200 million dollar price tag of its own. City officials said Loews will get sales tax revenue on the property and money from a surcharge to service debt. They’ll also pay a PILOT (payment in lieu of taxes) roughly a quarter of the value of the full property tax on the site. Those benefits could add to $100 million dependent on eventual revenue generation at the hotel.
“This is not some speculative development. We actually have demand we cannot meet,” said McGowen.
Loews also announced it’s purchasing the old police building nearby as part of the new hotel site. McGowen said the hotel will use the space for parking and back-of-house operations. He also said they intend to keep the historic portion of the police building that faces Adams.
At one point, discussions included placing the Loews hotel at the 100 North Main site. McGowen said redevelopment of that structure is still a focus for the administration.
“We are optimistic we will be able to find a solution for 100 North Main and everything around it,” said McGowen.
The deal will need approval by the Memphis City Council, where it’s expected to come up in November. City officials said the hotel would have to be completed by 2024.