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.

Jackson Redevelopment Authority in hunt for new director

Jackson Redevelopment Authority board members have decided to initiate a search for a new executive director.

The governing board took the action Wednesday morning. Willie Mott, who had been the interim chief and named the agency’s permanent executive director in July, is still on the job, according to Chairwoman Jennifer Johnson. She declined to elaborate further on his employment status.

In removing the “interim” from Mott’s title last summer, the JRA board agreed to pay him $60,000 a year but not provide health and retirement benefits, according to media reports.

Mott, a real estate professional with a Certified Commercial Investment Member, or CCIM, designation, served as executive director for several years in the early part of the last decade.

Johnson said she is unsure of the scope of the search or whether the board will use an executive recruiter. “I’d like a person on as soon as possible,” she said.

Her preference, she said, would be a redevelopment professional with a familiarity with Jackson who perhaps has worked elsewhere in recent years.

The CCIM designation would be important, though she said a lawyer, MBA holder, CPA or general real estate professional would be worthy of consideration.

The new executive director would be a Jackson Redevelopment Authority employee – not a City of Jackson employee. In all likelihood, the person selected would work under a yearly contract, Johnson said.

Journeyman Austin presents Jackson with convention center hotel offer

JACKSON, Mississippi — Texas hotel developer Journeyman Austin has submitted what it says is a confidential unsolicited proposal to build a 304-key, eight-floor convention center hotel on Pascagoula Street across from the Jackson Convention Complex, complete with a multi-floor-above-and-below ground parking structure.

Texas developer Journeyman Austin envisions an entertainment themed convention center hotel for Jackson.

Texas developer Journeyman Austin envisions an entertainment themed convention center hotel for Jackson.

Journeyman Austin presented the proposal to Mayor Chokwe Lumumba’s office shortly after 5 p.m. Monday. The Austin, Texas-based developer is awaiting word on whether the city will consider the proposal before releasing details on it.

Lumumba has not responded to repeated queries over the last four weeks from the Mississippi Business Journal regarding consideration of a Journeyman Austin proposal.

The newest proposal follows Tampa hotel developer Robinson Callen’s unsolicited offer to build a $60 million convention center hotel. That proposal has already received an official blessing from the Jackson Redevelopment Authority’s Board of Commissioners, though the JRA has refused to release any details of either the development agreement with Callen or the transfer to Callen of city-owned land across from the convention center on which the hotel would be built.

What is known about the deal comes from a press conference Harvey Johnson held in his final week as mayor. At that time, Johnson said the city would “backstop” $9 million of the project. The money would be loaned to Robinson Callen if hotel revenues fell short during the first few years of the hotel’s operation.

The mayor also said the hotel would be built on the approximately 14 acres the city had retrieved from Transcontinental Realty, a Dallas, Texas, hotel developer which sought for several years to build a hotel in Jackson and had taken possession of the 14 acres through a deal with the late Frank Melton during his time as mayor.

Journeyman Austin’s Jackson representative, Don Hewitt of Advanced Technologies Building Solutions, said it’s difficult to make a side-by-side comparison of the Journeyman proposal and Robinson Callen’s. “To be honest, we don’t even know what Callen’s offer is,” he said.

While Hewitt declined to provide cost specifics on the Journeyman Austin proposal, the developer submitted a proposal in December 2011 that specified a 304-room convention center hotel with an attached parking structure. That project carried a construction cost of around $67 million and total project cost of $75.5 million.

Hewitt in Tuesday’s interview insisted the Journeyman Austin offering is cost competitive with that of Robinson Callen.

“The hotel we have designed will far exceed the expectations of the city of Jackson or, for that matter, the state,” he said.

In an email Monday night, Hewitt said Journeyman’s proposal “highlights a music themed hotel designed to showcase the cultural diversity that exists in Jackson and the entire state.

“Similar to Memphis, we wanted to create a heart for Jackson entertainment. A hotel of this caliber will help to ensure that Jackson will regain its prominence and become a desired arts and entertainment destination.”

The idea is to integrate the hotel with the planned Farish Street entertainment district a couple of blocks away.

Like Robinson Callen, Journeyman would rely on New Market Tax Credits for a significant portion of the hotel’s funding as well as creation of a Tax Increment Financing District, according to Hewitt.

Meanwhile, all Journeyman Austin can do is wait to hear whether its proposal will get an opportunity o compete with that of Robinson Callen.

“We’re trying to make sure the city has an open and fair process for everyone to bid on projects, period,” Hewitt said.

 

 

Austin developer preparing unsolicited proposal for Jackson convention center hotel

JACKSON, Mississippi — Tampa’s Robinson Callen Development may soon have company in a quest to build a convention center hotel in Jackson.

While Robinson Callen has a head start with its unsolicited $60 million proposal having received an official blessing from the Jackson Redevelopment Authority’s Board of Commissioners on June 25, Austin, Texas, hotel developer Journeyman Austin wants to submit a proposal as well.

Journeyman Austin’s Jackson representative, Don Hewitt of Advanced Technologies Building Solutions, said Journeyman is preparing an unsolicited proposal to submit to Mayor Chokwe Lumumba, who was passed the Robinson Callen proposal by former Mayor Harvey Johnson on his way out of office. Latrice Westbrooks, interim spokeswoman for Lumumba, said the new mayor’s willingness to consider a competing proposal could hinge on the window that is in place for action on the Robinson Callen bid.

Not much has been disclosed publicly about the Robinson Callen proposal other than the company plans to build a 12-floor hotel and surface parking lot on 14 acres across Pascagoula Street from the Jackson Convention Complex, The City regained the 14 acres from hotel developer Transcontinental Realty of Dallas after its years of trying to get a hotel built came to naught.

Robinson Callen has also pledged to limit the City’s financial stake to $9 million in loans the company would access if room occupancies fell short of projections during the first five years of operation.

Further specifics, including the occupancy projections that would trigger the loans, have remained under lock and key at the Jackson Redevelopment Authority. The JRA’s interim executive director, Willie Mott, denied a Mississippi Business Journal Open Records law request for the development agreement with Robinson Callen the JRA governing board executed on June 25.

Mott previously said the agreement was undergoing a legal review but in a July 8 letter rejecting the open records request, he said the agreement is incomplete. However, he conceded in the same letter the JRA board has authorized “execution” of the agreement.

The MBJ views the refusal to release an agreement executed in public session a violation of the Mississippi Open Records law.

Though Journeyman Austin has not seen the Robinson Callen development proposal, the company thinks it can present an attractive proposal that would offer features such as a parking garage and neighboring retail, said Hewitt, who added he suspects the proposal remains secret as a way to prevent another developer such as Journeyman from knowing the proposal’s strengths and weaknesses.

Hewitt’s firm partnered with Journeyman Austin in November 2011 on a convention hotel proposal that competed with the Transcontinental Realty proposal. The City Council later shelved both proposals but promised Journeyman Austin it could submit a new proposal once the city revived the project.

Robert Gallup, VP of Journeyman Austin, said in a late June interview that he was “taken aback” by the city’s dropping of its previous pledge of issuing a new Request for Proposals.

“It’s frustrating,” Gallup said. “We would love to respond.”

Gallup said his company could get a proposal ready within 14 days. “We’re ready to go,” he said.

Hewitt could not say for certain that the Journeyman’s cost for building the hotel complete with a parking structure and retail would come in at or close to Robinson Callen’s $60 million estimate. “We’re going to leave the final cost numbers up to Journeyman,” he said, acknowledging that like Robinson Callen’s, Journeyman’s proposal would require some public dollars.

Hewitt said he has received no indications from Mayor Lumumba’s office that a Journeyman proposal would get a look. “I have no real expectations,” he said. “I would love for them to consider what we are offering. We are not asking for preferential treatment. We just want to be allowed to submit a bid.”

 

OUR VIEW: Running blind into a convention hotel deal

Robinson Callen Development’s proposal for a long-awaited convention hotel in Jackson just may be the “dream come true” that many local officials say it is.

But like most dreams, this one is unfolding in a chaotic fashion and offering up more than a few unanswered questions.

First, why is the $60 million deal moving at the speed of light with no public vetting and absolutely no attempt to see how Tampa-based Robinson Callen’s offer would compare with proposals from other convention hotel developers?

Does Robinson Callen have credible market research to show it can achieve the reported 70 percent occupancy that would be necessary to keep the developer from dipping into a $9 million loan fund the deal specifies the city maintain? If any hotel in the Jackson Central Business District achieved 70 percent occupancy in recent years, a bust of the hotel’s general manager would have gone immediately into the Hospitality Industry Hall of Fame. Since that hasn’t happened we can assume that averaging a 70 percent room fill-up remains as elusive as ever in the CBD.

Is Robinson Callen penny wise (seeking to save $3 million or more) and pound foolish by planning surface parking rather than a genuine parking garage? Tell us, in all sincerity, can Jackson be an appealing convention destination without offering a convenient and secure parking structure?

Could higher-than-expected vacancy rates force Robinson Callen to start discounting rooms at rates that diminish the rates other hotels in the Central Business District can charge? As a result, could we see other CBD hotels go the way of the abandoned Edison-Walthall on East Capitol Street?

Why did members of the Jackson Redevelopment Authority’s Board of Trustees vote to execute the development deal with Robinson Callen without actually having the deal in front of them? What happened to trust but verify?

Why won’t the JRA let the public see the development deal?

The last question is especially discomfiting. If this is the dream deal city officials say it is, why are the details still secret?

We’re told by JRA Executive Director Willie Mott that more lawyering must be done to fix loose ends in the development agreement. This, of course, returns us to our earlier question of why this deal is moving so quickly. Why did it get an official JRA vote if the deal is not in required legal form?

The Mississippi Business Journal submitted an Open Records request on June 27. We’ve been asking the JRA to cite the Mississippi statute under which it is refusing public examination of the development deal.

This is one question to which we do have the answer, but it did not come from the Jackson Redevelopment Authority: Mississippi law does not allow public agencies to withhold details on deals that have been voted on and approved in an open session.

A convention hotel can be a wonderful and valuable addition to the CBD. The business district sorely needs the dollars the hotel could generate through its envisioned role of helping the 3-year-old Jackson Convention Center Complex reach its potential for bookings of conventions and meetings.

A project this hugely important need not be undertaken at the speed of light. Nor should it be done without shining plenty of light on it ahead of time.