VOL. 133 | NO. 5 | Friday, January 5, 2018
New Owners of Downtown Hotel Seeking PILOT Transfer, Bakery Development Project Progressing
By Patrick Lantrip
Richmond, Virginia-based Apple Hospitality REIT is seeking an assignment from the Center City Revenue Finance Corp. in order to complete the purchase of the Hampton Inn & Suites Memphis – Beale Street located at 175 Peabody Place in Downtown Memphis.
According to a letter sent to Downtown Memphis Commission president Jennifer Oswalt, Apple and the hotel’s current owners, Cary Watermark Investors, entered into a purchase and sale agreement on Dec. 22, 2017, which has to be approved by the CCRFC on or before Feb. 5, 2018.
“The expectation is that Apple would continue to operate the Property as the ‘Hampton Inn & Suites Memphis -Beale Street’ after the assignment of the Lease by Landlord to Assignee,” Apple executive vice president and chief legal officer David Buckly wrote. “Apple is currently in discussions with a few third-party hotel management companies regarding the management of the property, including the current hotel manager.”
Apple Hospitality REIT’s portfolio consists of 239 hotels, with approximately 30,300 guestrooms in 34 states. If approved, Apple’s wholly-owned subsidiary, Apple Nine Hospitality Ownership Inc., would take over ownership.
The PILOT transfer request is scheduled for the CCRFC’s Jan. 9 meeting.
Also on the CCRFC‘s Jan. 9 meeting, are two other PILOT transfers, both involving the Bakery Development in the Medical District.
In the first transfer request, Orion Federal Credit Union is seeking to purchase the portion of the project where its headquarters will be located.
In August, Orion announced its intentions to relocate its corporate headquarters to the former Wonder Bread bakery building at 400 Monroe Ave.
Orion sold its current headquarters to New York-based Pergament Properties, doing business as 7845 Highway 64 LLC, on June 30 for $3.4 million.
Since the CCRFC approved developer PKG Properties’ request for a 20-year tax incentive to help offset construction costs for the project in August, Orion must seek a PILOT transfer from the DMC affiliate board.
“On behalf of Orion, we hearby request CCRFC’s consent to the assignment by PKG of the PILOT incentives awarded to PKG to be applied to the Orion Property,” attorney James McLaren said in a letter to Oswalt on behalf of Orion.
Additionally, LEO Events LLC is seeking a separate, but similar PILOT transfer for two of the project’s other properties – 407 and 411 Monroe Ave.
In total, the $73 million mixed-used Bakery Development project consists of 86 upscale multifamily units, a 480-space parking garage and 150,000 square feet of office and retail space spread out across five parcels.