A Tampa hotel management and development company says it intends to break ground on a 330-room, $60-million convention center hotel in Jackson within six months.
The saving grace of this project, said outgoing- Mayor Harvey Johnson, is that it would require the city to provide a backstop of only $9 million.
Harvey called the proposal from Robinson Callen Development a far better deal than the $90-million investment the city would have had to make in a proposal from Transcontinental Realty Investors, or TCI, a Dallas real estate investment group that worked for years to get a convention center hotel built in Jackson to no avail.
At press time, the Jackson Redevelopment Authority was to vote on the proposal at a meeting Wednesday. From there, the deal would go to the Jackson City Council. Several council members and Mayor-elect Chokwe Lumumba were on hand for a press conference Tuesday announcing the hotel. They indicated the deal looks appealing to them.
“I’m certainly impressed by the advantages of this proposal over the one we received before,” Lumumba said.
No indication was given at the press conference whether the Jackson Redevelopment Authority put the hotel project through a request for proposals process. The RFP process proved the undoing of the TCI deal as the JRA on Thankgiving-eve 2011 tried to compress the process from the customary 30 days to 15 days to accommodate TCI’s bonding timeline. The snag came when a new group — Journeyman Austin — presented a proposal during the shortened RFP period.
With a new player on the scene and public criticism over the JRA board’s willingness to accommodate one proposer over another, city council members backed away from both proposals.
That left an impasse, with TCI in possession of about 4.5 acres across from the Convention Complex and demanding the city pay it $14 million for the property, a sum far above what TCI had paid the JRA for the land just a few years before.
As time went by, TCI began looking for a way out and sought a solution that would end its approximately $6 million in debt on the 4.5 acres, according to Mayor Johnson. “They wanted to resolve it and were willing to make concessions,” he said.
Johnson said the city regained the 4.5 acres by agreeing to take over the debt, which is owed to the U.S. Department of Urban Development through a Section 108 loan. Such loans are allocated to local governments for revitalization and redevelopment projects and can be awarded to third parties such as a hotel developer through a public-private partnership.
“The land is worth more than that,” Johnson said of the remaining debt on the 4.5 acres for which the city has regained ownership.
The 4.5 acres are part of the nine or so acres on which Robinson Callen plans to erect the convention hotel.
As presented, the hotel would have 330 rooms, a full-service restaurant, meeting rooms and landscaped surface parking lot. A catwalk across Pascagoula Street would connect the hotel to the Convention Complex.
Robinson Callen vice president David Clement said the company envisions a four-to-six month timeline for starting for construction. “We’re on a fast-track,” Clement said after the press conference.
He conceded, though, that a huge amount of work lies ahead.
The work includes lining up financing such as New Market Tax credits, which are allocated by the federal government for urban revitalization and are valued by developers for the financing they offer.
Clement said the developer also wants to obtain financing through establishment of a Tax Increment Financing, or TIF, district. Under this arrangement, at tax rate would be set based on current valuation of the properties in the district. As property values rise, the money collected above the set tax rate and former property values would go into a TIF fund. Money from the fund could, in turn, be put toward the hotel development.
The TIF district presumably would encompass several blocks area around the Convention Complex.
When asked how much of the develoment company’s own money would go into the project, Clement did not provide a figure.
Robinson Callen prefers to develop hotels in city centers, which it has done in such cities as Tampa and Nashville. Jackson’s land availability next to a three-year old convention center appealed greatly to the company, Clement said, and noted Robinson Callen selected Jackson over several other cities.
“It has national appeal,” Clement said of the Capital City.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info