VOL. 118 | NO. 34 | Thursday, February 26, 2004
Within the next month, plans are likely to be finalized that would bring
construction of a new major hotel across from the Fed
Downtown Readies for Upscale Hotel
Westin near arena to round out entertainment corridor
The Daily News
Within weeks, plans could be finalized for construction of a
major hotel across from the $250 million FedExForum scheduled to open in the
A joint development by Memphis-based Performa Entertainment
Real Estate Inc. and Nashville-based Senate Hospitality Group LLC would add a
220-room Westin Hotel to a site currently used as a parking lot between Blues
Alley and Lt. George W. Lee Avenue, just north of the Gibson Guitar Factory.
Major development. Dave Jones, one of four principals
of Senate Hospitality, said final agreements concerning the hotel and a major
restaurant to accompany the hotel are about two weeks away.
I really wouldnt want to say anything (more) right now
because of the political turmoil going on in the city, Jones said. Im
afraid it might spill over onto the sidewalks with everything were trying to
Cost for the hotel and a 420-car parking garage is estimated
at $30 million.
Local architecture firm Hnedak Bobo Group has been tapped to
design the hotel; work is expected to take about 15 months.
Hotel room shortage. According to the Memphis
Convention and Visitors Bureau, there are about 2,300 hotel rooms available
Downtown. Local tourism officials have said many more rooms are needed to help
support Downtown revitalization and accommodate guests of Cook Convention
Center City Commission president Jeff Sanford said as of
yet, no parties involved with the proposed Westin Hotel have inquired about
applying for CCC development tax incentives.
But, he said developers are reacting to what he called a
first-class hotel room deficit Downtown.
It doesnt take a real estate genius to see that (the
Westin site) is a great site for a hotel, not just because its across the
street from the Forum but because its so well located in a rapidly growing
sports and entertainment district, Sanford said.
Upscale rooms. Douglas Browne, general manager of The
Peabody, expressed doubts about the ability of the Downtown market to embrace
the high rates a Westin property could charge.
I think a new hotel is good for us Downtown, but Im
surprised that someone is making that level of investment, Browne said.
Browne, a member of the Memphis Hotel/Motel Association,
said the occupancy rate for Downtown hotels is generally about 60 percent;
average room rates are less than $100. He said occupancy typically averages in
the 70 percent range before new hotels emerge.
My guess is what theyll have to spend to build that hotel,
theyre going to need much higher average rates, he said. I think its always
nice to have good products, but will the market pay for it is another story.
Future potential. Sanford said as Downtown development
activity flourishes, investors are making decisions based on the areas future
Investors look at the Downtown market, and if Westin is the
flag, it will be a positive indication that people knowledgeable in the hotel
industry think theres a need for more upscale rooms, he said.
Westin Hotels and Resorts owns and manages more than 100
hotel and resort properties in 25 countries.
In the works. Also Downtown, the CCC is working with
developers who want to re-establish a hotel in the 91-year-old former Chisca
Hotel structure at 272 S. Main St. Additionally, the Downtown Marriott is
expanding by 200 rooms, and talk is ongoing about two other possible Downtown
Sanford said a new hotel doesnt necessarily spur additional
hotel development in the immediate vicinity.
Hotel developers read the market in terms of tourism as
well as first-class office space, which remains weak in Memphis and Downtown,
he said. But were hoping for many more hotel rooms in the Downtown area.
zero. The proposed Westin Hotel would be built directly behind a number of
businesses on the north side of Beale Street, including Silky OSullivans,
located at the corner of Third Street and Beale.
Flanagan, OSullivans comptroller, said the addition of FedExForum and the
upscale hotel will make that area the focal point of Downtown.
already at ground zero here, and a hotel would absolutely mean more growth it
would mean nothing but more business, Flanagan said.