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Jackson issues RFP in 3rd try for convention center hotel developer

The Jackson Redevelopment Authority is taking a third swing at getting a convention center hotel built.

With the backing of Jackson’s elected officials, the JRA late last month issued a Request for Proposals for a hotel of at least 300 rooms on Pascagoula Street across from the Jackson Convention Complex, an approximately 300,000 square-foot conventions and meetings center which opened slightly more than three years ago. A developer interested in purchasing, leasing or redeveloping a convention hotel property is eligible for an 80 percent sales tax rebate to cover up to 30 percent of capital costs over a 15-year life for the rebate, the JRA’s RFP stated.

Addressing the possibility of drawing under-capitalized developers, the JRA says it will consider building the hotel in phases.

The RFP noted the JRA is willing to explore additional ways to cover any funding gap.

“The Authority understands the economics of the city’s hotel market and may be prepared to provide some assistance in addressing financial issues,” te RFP advised.

Part of the funding gap is expected to come from $3.8 million still owed on the $7 million buy-back of the 14 acres across Pascagoula Street from the convention center. The City, at the late Mayor Frank Melton’s insistence, joined with the JRA a half decade ago to cede the land to a Dallas hotel developer. More recently, the City and JRA paid $7 million to get it back.

How far the City and JRA are willing to go in closing a funding gap is unclear. However, in the first of the trio of RFPs the JRA issued, the City and redevelopment agency offered to backstop  up to $50 million in loans for a $90 million hotel proposed by Transcontinental Realty International, or TCI, of Dallas.

The Texas company eventually lost the deal after winning the RFP to build a hotel. In leaving the deal, however, TCI executives went home with a $7 million payment for land the City originally purchased with federal Community Development Block Grant money.

The JRA would like a covered connector between the hotel and convention complex but will consider proposals absent a connector. But the potential developer must explain why a connector is not desirable or appropriate.

The JRA wants covered parking as well – 700 spaces, in fact. However, proposals with a combination of garage and surface parking will get a look, the agency says. So will a plan for designated surface parking and street parking, though the JRA noted this would be acceptable only in anticipation of a structure getting built later on.

The second RFP occurred after Mayor Harvey Johnson  brought Tampa hotel developer Robinson Callen to Jackson to discuss a convention center hotel. Johnson, in the final days of his mayoral term, introduced Robinson Callen as a new developer who would build the hotel with $9 million in  city money in the deal. However, the developer would be getting land on Pascagoula Street across from the convention center.

The Tampa company received an endorsement from the JRA in a development arrangement that included the ceding of property on Pascagoula Street. Neither the mayor, JRA nor Robinson Callen would say if the Pascagoula parcel was the land the City bought back from TCI.

The Robinson Callen deal unraveled after the late Mayor Chowke Lumumba insisted a new Request for Proposals be issued. The RFP brought a response from Texas hotel developer Journeyman Austin. Not long afterward, the mayor and city council decided against pursuing a hotel development deal.

Journeyman proposed a 304-room, eight-floor, entertainment themed hotel that included garage parking. Callen Robinson offered up a 1-floor, 314-room hotel and skywalk containing the center. Surface parking would serve in place of a garage.

Callen said it could build the hotel for $60 million and would use the City’s $9 million only if hotel revenue fell short of covering the debt.

A convention center hotel developer can expect competition from a 204-room Westin hotel that is to go nearby on Tombigbee Street. The $60 million Westin has $10 million in loan backing from the JRA, $20 million from Hinds County and a promise of $7 million in sales tax rebates from a tax increment financing district. The Westin developers, Capital Hotel Associates, say they have lined up sufficient private financing and are ready to break any time now.

Responses to the new RFP must be submitted by June 30.

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One comment

  1. Why in the world can we not just get the Wesin to build at the convention center hotel space. Who in their right mind would want to stay on tobigbee street when there is a hotel connected to conve ruin center

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