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OUR VIEW — Straight talk needed ahead of Jackson convention center hotel deal

When you come to a fork in the road, “take it,” Yogi Berra advises.

If only the choice were that easy for Jackson’s elected leaders as they decide whether to take the Capital City into the convention center hotel business at considerable financial risk to taxpayers.

This may be the year a public-private deal for the hotel gets done. What once was theory — the 5-year-old Jackson Convention Complex can’t live much longer without a hotel — has turned to fact. Five years of struggle for bookings and revenue bear this out.

Unlike in a pair of previous attempts, the Jackson Redevelopment Authority has kept the drama to a minimum, having issued requests for proposals that gave developers time to prepare and present plans for a 300-room hotel that will be a catalyst for increasing business at the Jackson Convention Complex. The agency has also created a review board of civic and business leaders, including veterans of the city’s hospitality sector, to rank the three proposals received.

A timeframe for review and selection – or rejection of all proposals – has been set, with Oct. 29 the deadline for a decision.

What hasn’t come forward from either the JRA or others promoting development of a hotel is a sincere explanation for what is unfolding: This is a bid to rescue the convention center. Its five-year history bears out fears that a slow but steady demise is ahead without a hotel to support it.

Jackson’s mayor and City Council ultimately must say yea or nay on this third attempt in five years to get a publicly backed convention hotel built. The winning developer most likely will need slightly more than $40 million in loan backing, and sizable tax abatements, sales tax rebates and other funding “gap closers” the JRA has promised.

Missing is any evidence circumstantial or otherwise that the hotel can make money or even break even.

Absent that evidence, Jackson’s elected leaders ought to be clear that the tens of millions of dollars that will back the hotel actually represent an insurance policy of sorts on the City’s $325 million investment in the convention complex. What they can’t do is call the wager a sound investment in a hotel property that can fetch nightly rates twice that of downtown competitors.

That the process has reached this stage without a thorough assessment of the market baffles Michael “Doc” Terry, a University of Central Florida hospitality management professor and former general manager of both the Hilton Hotel chain and International Hotel Group.

No way should an RFP been issued ahead of a professional feasibility study addressing market segments, projected occupancies, daily rates, branding and other components of such a project, Mr. Terry told us Tuesday.

“I can’t believe somebody’s business mind would work like that,” he said. “It is really irresponsible to take that political risk and financial risk without doing a feasibility study.”

Adding to the uncertainty of how the hotel can do in the downtown market is a competing 200-room Westin that broke last week at 315 Tombigbee St. and the likelihood that Madison County will get a 200-room hotel to support a proposed 60,000-square-foot conference center.

MS Block Development, one of the three respondents to the JRA’s Request for Proposals, saw a need to follow Mr. Terry’s advice but stands to have its proposal eliminated from consideration because of it. The developer declined to include financial details without first completing an independent feasibility study to determine “demand utilization of the hotel and garage.”

The development company understandably has cold feet but its potential public sector partner – the Jackson Redevelopment Authority – apparently does not.

Look for the JRA to send a deal proposal to the mayor and City Council by the end of the year.

Nothing will be easy for Jackson’s elected leaders in deciding on a convention hotel deal. The temptation will be to make a “yes” vote and tell the public the hotel will be a financial winner.

The truth they must tell is that the convention hotel is a very expensive roll of the dice intended to make a winner out of a losing Jackson Convention Complex.

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