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VOL. 133 | NO. 96 | Monday, May 14, 2018

Second Convention Center Hotel Has Footprint Beyond City’s Tallest Building

By Bill Dries

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After four years as an emptied out eyesore and lots of promises with very little follow up, the city’s tallest building is at the center of a tentative deal to make it the second convention center hotel.

100 North Main (Daily News File/Andrew J. Breig)

The 100 North Main Building and the row of buildings to its south on Main between Adams and Jefferson avenues would become a 600-room Loews brand hotel with convention and meeting space, retail, restaurants and a parking garage, according to terms of a letter of intent announced last week by the city administration.

“This project, if realized, would be two major steps forward – both with a new convention center hotel and the reimagining of a historic property,” Memphis Mayor Jim Strickland said in a written statement. “This could represent a major investment in Downtown, which means a major investment in all of Memphis with new jobs and more economic growth from which all Memphians will benefit. I’m eager to work with these partners to make this a reality.”

THM, the New York City-based developer of the project, added more detail to the plan Friday, saying in a statement that the hotel would likely include 110 apartment units as well as the hotel rooms. In addition to the landmark, the development would include two 30-story office towers of more than 500,000 square feet and a 467,000-square-foot parking garage for more than 1,200 cars. THM has spent $12 million to date on acquiring property south of 100 North Main to Jefferson Avenue.

THM also has the vacant Jefferson Plaza building on the southeast corner of Second Street and Jefferson under contract for $4 million. The contract includes open land on the south side of the Jefferson Plaza building where a parking garage once stood and before that, the Irving Block Prison in the Civil War era.

THM executive co-chair Arlene Maidman said the company “intends to redevelop the three contiguous acres as a single mixed-used project, consisting of more than 2 million square feet of hospitality, extended stay, retail, residential, commercial and parking uses.”

The development’s footprint could also jump Second Street to take in the area that is now the Hospitality Hub program. The letter of intent dated May 8 and released last week also says the city would transfer the program for the homeless to the old Police West Precinct building at 247 Washington Ave.

THM Memphis Acquisitions LLC bought the 37-story skyscraper built in 1965 in foreclosure on the steps of the nearby Judge D’Army Bailey Courthouse in January.

The landmark went into foreclosure in late 2016 when its then-owner, IHM Memphis LLC, defaulted on a $2.8 million loan. IHM had emptied the building of its remaining few tenants in 2014 as it announced grand plans for redevelopment and gave tours of the revolving restaurant at the top of the building.

None of those plans ever came anywhere near happening and the building quickly became an eyesore and an attraction for urban explorers looking for the view from the city’s tallest building.

City leaders, including the Downtown Memphis Commission, applied what pressure they could, taking IHM to General Sessions Environmental Court where Judge Larry Potter declared the building a public nuisance under state law.

THM’s first step was to more adequately board up the building, hire security guards to patrol it and install better lighting around it.

Meanwhile, Strickland had been fielding offers from convention center hotel developers after plans for an extensive renovation of the nearby Memphis Cook Convention Center drew their interest.

The initial plans centered on a hotel where the Mud Island parking garage currently stands today on Front Street where Poplar Avenue ends. But that was quickly ruled out because of likely opposition to a riverside high rise hotel from the Overton heirs – the group of descendants of the city’s founders who set aside riverfront property for public use forever when the city was founded nearly 200 years ago.

Strickland’s conditions have been that the city has no interest in owning or financing the construction of such a hotel.

According to the May 8 letter of intent, the hotel at 100 North Main would be in service by the end of 2022, under terms of the financing, and a $175 million renovation of the Memphis Cook Convention Center would be completed by the end of 2020.

The city agrees to seek financing for the convention center hotel through sales tax revenue from the Downtown Tourism Development Zone for a 30-year period.

The city will also seek permission for a 5 percent tourism surcharge from the state, with the revenues going to the project over a 30-year period.

The developers will be seeking federal historic and new market tax credits with the city’s assistance for the adaptive reuse of the 100 North Main Building.

The letter of intent acknowledges that the Sheraton Hotel, directly across Main Street from the Memphis Cook Convention Center, remains “an official convention center hotel” by agreement with the city in 1998 that includes booking and other rights linked to the convention center.

But the arrangement with the Sheraton is not exclusive, allowing for the new hotel to also be designated “an official convention center hotel.” That designation includes a room block agreement with the Memphis Convention & Visitors Bureau still to be negotiated.

PROPERTY SALES 28 290 16,197
MORTGAGES 33 165 10,087
BUILDING PERMITS 184 608 38,544
BANKRUPTCIES 33 125 7,597