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VOL. 133 | NO. 69 | Thursday, April 5, 2018

Two Downtown Hotel Projects in Question Appear to be Moving Forward

By Patrick Lantrip

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Two hotel projects Downtown Memphis that were seemingly in stasis both appear to moving forward.

Though unrelated, both projects filed paperwork Tuesday, April 3 that indicate physical progress may soon be around the corner.

In the first, the developers of an Arrive Hotel located at the former Memphis College of Art graduate school at 477 S. Main St. are seeking approval from the Center City Revenue Finance Corp. for a change of ownership and timeline extension.

on Tuesday, Feb. 14 Wessman Development was awarded a 15-year payment-in-lieu-of-taxes incentive by the CCRFC for the 62-room South Main boutique hotel, however two days later, the Riverside County District Attorney’s Office in California filed a criminal complaint against titular principal John Wessman in a public corruption case that included former Palm Springs, California mayor Stephen Pougnet.

Now after more than a year of silence, the project appears to moving forward without Wessman.

“Following CCRFC's approval of the Project, the principals of the Project determined that it was in the best interest of the Project to restructure the corporate existence of the Project,” attorney Chad Wilgenbusch of Baker, Donelson, Bearman, Caldwell, Berkowitz said in a letter of intent. “That restructuring took materially longer than expected and extended the timeline of the Project development beyond the initial 1- year closing timeline contained in the CCRFC policies.”

As a result, the initial applicant of the project, 477 Memphis Hotel, LLC, will now be replaced by South Main Hotel, LLC and the project development will be led by directly by its manager, Arrive Hotels & Restaurants.

All mention of Wessman in the application has been stricken through with red ink and replaced with information of Arrive Hotels and its lead developer and co-founder Chris Pardo, who was the main point person in Memphis during last year’s application process.

The CCRFC board will review the project during its April 10 meeting.

Meanwhile, a completely unrelated hotel in the center of Downtown is taking another tangible step forward.

Also on Tuesday, April 3, MRN Hospitality filed paperwork with the Land Use Control Board to advance its own hotel project at the former Benchmark Hotel site at 164 Union Ave.

“The developer will use the shell of the existing building as it has been completely gutted of all interior and exterior walls,” project consultant Cindy Reaves said in MNR’s Special Use Permit application. “The proposed hotel will contain approximately 172 rooms with a restaurant and bear, fitness center and approximately 1,500 square feet of meeting space.”

Though a partial demolition of three of the exterior walls occurred in 2016, the project remained shelled and fenced-off for quite some time until the Downtown Memphis Commission announced it was taking legal action against MNR to declare the site a public nuisance in January.

On Feb. 1, then Enviromental Court Larry Potter made the “tough” decision to declare the site a public nuisance after several hours of intense legal wrangling by attorneys Danny Schaffzin, representing the DMC and a coalition of surrounding business owners, and William Sessions, representing MNR Hospitality.

Before retiring from his post, Potter ordered mediation between the two side to ensure the project continues to move forward.

The next hearing in that case is set for April 12, while the LUCB will review MNR’s application during its April 26 meeting.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 56 56 9,658
MORTGAGES 49 49 10,665
FORECLOSURE NOTICES 10 10 1,299
BUILDING PERMITS 212 212 21,170
BANKRUPTCIES 49 49 6,157
BUSINESS LICENSES 34 34 3,973
UTILITY CONNECTIONS 38 38 2,930
MARRIAGE LICENSES 28 28 2,049