MEMPHIS, Tenn. - A $210 million investment is expected to head to Downtown Memphis as the city makes major investments in its convention center.
On Thursday, the City of Memphis signed an agreement with Loews Hotels for a 17-story, 500-plus room hotel on the Main Street mall across from City Hall.
It wasn’t the only announcement as part of the deal. Loews Hotel also acquired the old police station on Adams and Main Street, according to the Downtown Memphis Commission. The land was transferred to Loews for $1, according to the agreement.
The agreement shows it’s for use of what’s called the PILOT program, or payment in lieu of taxes, and that Loews will pay back the city the fair market price at the end of the program.
The program ends in 30 years; the city is expected to get at least $2.5 million.
Beyond that: who will pay for the $210 million hotel?
According to the document, it will come from both public and private funds.
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“[The money is not a] diversion of current assets,” said Jennifer Oswalt.
Oswalt, president of the Downtown Memphis Commission, said the hotel qualified for Tourism Development, because it will be a convention center hotel.
Loews will get back the sales tax made from the hotel and use that as part of its funding, according to the agreement and Oswalt.
The hotel will get to use state sales taxes until 2030 and city sales taxes for 30 years.
“What the city will receive from having this hotel that will service the convention center will bring us many more dollars in ancillary income from those people coming to stay.”
On top of that, Oswalt said, the city adds more attraction Downtown, helps capitalize on a $200 million investment into the convention center and cleans up blight with the purchase of the old police building.
Oswalt said Loews is putting about $100 million of its own cash and debt into the project.
Loews did not respond to our inquiry on its funding breakdown.
The hotel is expected to be completed by Summer 2024.
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