By TED CARTER
The newest entry to downtown’s Jackson’s hotel market, a 204-room Westin, will break ground at 9 a.m. on Aug. 4, developer Joseph Simpson says.
The $60 million hotel is planned for 315 Tombigbee St. at the site of the vacant Mississippi Valley Title building.
Project funding includes $10 million in urban renewal bonds issued by the Jackson Redevelopment Authority and backed by the city’s general fund, $20 million in bonds backed by Hinds County and $7 million in sales tax rebates from a Tax Increment Financing District that would be established for the hotel property. Jackson City Council agreed to the loan arrangement last February.
Simpson and his Capital Hotel Associates partners are projecting a $145 nightly rate. The rate would be nearly double the highest average daily rate hotels in the Central Business District have seen since 2009.
Year to date average daily rates are $74.02 and with occupancies averaging 59.8, STR, formerly Smith Travel Research, reports. This year’s average daily rates and occupancies have been a substantial improvement over 2014, when average daily rates totaled $60.50. STR called 2014 an outlier for downtown Jackson, which in 2013 had average daily rates of $71.14.
The Central Business District’s lodging sector has been on a roller coaster of sorts the past six years, with occupancies failing below 40 percent some months and climbing into the high 60 percent range other months.
Revenue per room — calculated by multiplying a hotel’s average daily room rate by its occupancy rate — has fluctuated significantly as well, dropping to as low as the high $20s some months and rebounding to as high as the upper $40s other months, according to STR data provided in December 2014.
Simpson said in an interview late last year he sees ample upside for the project and insists he is “100 percent” convinced the Westin and the luxury category it will occupy can compete strongly in the downtown market.
“We will be the only full service Starwood hotel in Mississippi,” he said, referring to a luxury hotel and resort company which in addition to Westin includes Sheraton, Le Meridien, St. Regis and W hotels.
“I think I am being very conservative,” Simpson, an investment adviser and co-owner of downtown’s Iron Horse Grill, said of his nightly rate expectations.
The Westin could be joined in a few years by a Jackson convention center hotel. The Jackson Redevelopment Authority has received four responses to a Request for Proposals seeking development of a hotel complex of at least 300 rooms on land adjacent to the convention complex.