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VOL. 130 | NO. 184 | Tuesday, September 22, 2015

Hotel Density Fuels Memphis Convention Center Ambitions

By Bill Dries

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The best indicator that the national recession was lifting in Memphis was the emergence this year of numerous plans for new hotels and motels.

The planned $57 million in improvements to the Memphis Cook Convention Center have restarted a discussion about longer-term plans for an expansion that could include two new riverside hotels.

(Fleming Architects)

But aside from Whitehaven’s 450-room, $90 million Guest House at Graceland, most of the planned projects are small. And the smaller hotels do little to resolve the long-standing chicken-and-egg question about which should come first – more hotel rooms or more and better convention space.

“To say that we are dominated by select-service, limited-service smaller properties in this entire marketplace is an understatement,” Memphis Convention & Visitors Bureau president Kevin Kane said on the WKNO-TV program “Behind The Headlines.” “I think if you want to push the needle to bring larger groups in like the National Baptist Convention … you need larger full-scale hotels to do that and we are void of those.”

Behind The Headlines, hosted by The Daily News publisher Eric Barnes, can be seen on The Daily News video page, video.memphisdailynews.com.

The Downtown Memphis Commission is exploring new guidelines that would push tax incentives to hotels that have a direct impact on attracting large conventions and meetings to the city. That means a denser Downtown.

“We’re realizing that we need larger hotels that can accommodate these conventions coming to Memphis,” said Leslie Gower, the DMC’s marketing and communications vice president.

She counts 4,100 hotel rooms Downtown that in 2013 generated $250 million in revenue for the city.

“We’re trying to get as many people as we can in a parcel. That’s our goal – density,” Gower said, citing the $160 million, two-tower One Beale project. Its 18-story tower overlooking Riverside Drive and the Mississippi River will feature a 255-room hotel: “What we like to see are projects that bring a lot of people into towers.”

Kane’s citywide perspective counts 240 hotels in all of Shelby County with 23,000 rooms, but only 19 of those hotels have 150 rooms or more. Another five have at least 300 rooms and there is only one hotel with more than 500 – the 603-room Sheraton Memphis Downtown that’s connected to the Memphis Cook Convention Center.

“I would rather have one, 500-room property than 10, 100-room properties,” Kane said. “Usually the larger properties have larger sales forces. They have lots of meeting space. They bring business to the market versus just spreading business around.”

One way to dramatically increase room-count density would be a westward expansion of the existing convention center toward the Memphis harbor and Mississippi River.

“We have the footprint there on city-owned property to do a major expansion of something of the magnitude … of a Music City Center in Nashville that would be connected to our existing convention center,” Kane said. “And on that footprint, we have room for two larger hotels if we can find the hotel partners.”

Such an expansion over and under existing interstate ramps, which would add 2,000 riverfront hotel rooms, is still tentative and at least 10 years in the future.

It’s also on the other side of a smaller-scale renovation still in the planning stages. A hike in the local hotel-motel bed tax finance will finance most of that $57 million renovation.

“In 10 years, 15 years, the whole world changes,” Kane said of the plans to push to the river’s edge. “We may decide we need a convention center in another part of town.”

But the willingness of Kane and other civic leaders to unveil the $57 million renovation project, as well as a future glimpse of the much larger expansion, reflects a view that staying put is preferable to relocating.

“We have said if we can improve this convention center and make it very competitive the way it is now, it would be more reasonable for us in the long term to expand where we are instead of going to a totally different location and having to find a new use like we did at The Pyramid.”

PROPERTY SALES 92 480 7,835
MORTGAGES 115 551 8,785
BUILDING PERMITS 325 1,167 17,068
BANKRUPTCIES 39 311 5,159