City Council resolution on second convention center hotel answers Sheraton lawsuit claim

By Updated: February 06, 2019 4:00 AM CT | Published: February 05, 2019 9:02 PM CT

The Memphis City Council approved a resolution Tuesday on the financing of a second convention center hotel that figures into the changing terms of a lawsuit filed by the Sheraton hotel chain over the incentives.

The resolution ratifies Memphis Mayor Jim Strickland’s presentation to the Tennessee Building Commission last year to get the second hotel approved as a qualified public use facility for revenue from the Downtown Tourism Development Zone.

The building commission approved the use.

The zone captures an increment of sales tax revenue generated in the Downtown area that can be used specifically to finance tourist attractions and tourism-related projects.

The resolution, which was added to the council agenda Tuesday at the advice of council attorney Allan Wade, also specifically states the hotel to be built by Loews Hotel LLC and Townhouse Management Co. will be constructed on the open part of the Civic Center Plaza across from City Hall.

Sheraton officials are suing the city in Chancery Court over the tax incentives, which they say would give an unfair advantage to a competitor to their convention center hotel.

Chancellor JoeDae Jenkins delayed a hearing late last month on the lawsuit to give the city a chance to respond to amendments Sheraton’s attorneys made to their complaint.

WAYNE RISHER: Chancellor delays hearing on expanded Sheraton challenge of Loews incentives

The changes claim the council didn’t take the necessary steps to approve and follow through on the state’s approval of the TDZ request. Sheraton also claims the council acted without a feasibility study. The city’s position has been that such a study is not necessary for the council to act.

But the resolution approved Tuesday says the council did consider a feasibility study and a hotel need analysis in concurring, approving and adopting the action by the Tennessee Building Commission.

When the Chancery Court case is back in court later this month, the city will have the ratification resolution that states, among other things, “The council was fully informed about the economic viability of the Downtown TDZ and its current and proposed public use facility components … and is even more informed on this date.”

Wade told the council the legal challenge by Sheraton “borders on being frivolous.”

The city and Loews and THM are expected to close by end of March on the deal for the $200 million convention center complex, which contains the 500-room hotel and other buildings, including 100 North Main.

In other action Tuesday, the council rejected a mixed-use rezoning of part of Uptown by Greenmark LLC and Elmington Capital Group. The proposal was a step toward apartments with retail, similar to ones in the South Main area.

The 1.9-acre area, which remains zoned for moderate-density residential development, is bounded by North Main Street, Henry Avenue, North Second Street and Keel Avenue.

Councilman Berlin Boyd, whose district includes the area, was instrumental in the outcome of the council vote, saying he opposed it and urged other council members to vote against it.

He cited parking and litter problems and “an abundance of neighbor complaints.”

“They don’t like it,” he said of his constituents, adding the development plans were “not filling in the gaps correctly.”

The council also rejected plans for a commercial development including gas sales on the southwest corner of Ross Road and East Shelby Drive.

The council approved a 4,400-square-foot, two-story work/live development on the northeast corner of South Fourth Street and East McLemore Avenue.

The council also got its first look in committee on a $15.2 million relocation of a 48-inch existing sewer line from the current St. Jude Children’s Research Hospital campus as part of the hospital’s expansion into the Pinch District. The city will finance the project with revenue from the city sewer fund, which has a balance of $55 million. The city sewer fund money used will be reimbursed with state funding.

The full council votes on the appropriation in two weeks.

<strong>Sheraton officials are suing the city of Memphis over tax incentives for a second convention center hotel, which they say would compete with the Downtown Sheraton.&nbsp;</strong>(Daily Memphian file)

Sheraton officials are suing the city of Memphis over tax incentives for a second convention center hotel, which they say would compete with the Downtown Sheraton. (Daily Memphian file)


Memphis City Council Loews Hotel & Co. Sheraton Memphis Downtown Hotel St. Jude Children's Research Hospital Joedae Jenkins
Bill Dries

Bill Dries

Bill Dries covers city government and politics. He is a native Memphian and has been a reporter for more than 40 years.

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