CA: Financier plans high-rise hotel
Denver hotel consultant Robert Swerdling plans to build a high-rise hotel Downtown next to the Memphis Cook Convention Center.
The former Wall Street hotel financier said he has lined up $180 million and is working on the preliminary design details for a glass tower of at least 600 rooms facing Front at Poplar on the current site of a city-owned parking garage.
The new hotel would address the need for a large number of rooms immediately adjacent to the convention center, which is about to undergo a $60 million renovation.
Memphis officials say they believe Swerdling has the ability to pull together a project but so far has presented few details on paper in part because he is in the initial phase.
“If we do this it’s going to be transformative for the north end of Downtown,’’ said Kevin Kane, head of the Memphis Convention & Visitors Bureau. “He has a good track record around the country. He’s done a number of developments. But I think it’s going to come down to whether he can come up with the $180 million.”
Swerdling insists he can.
“I’ve attracted significant interest from capital sources,” he said, noting that the Memphis tourism trade and the established convention business lessen the risk for investors, particularly in a time of unusually low interest rates.
Swerdling and Memphis officials have discussed a convention hotel for two years, Kane said. Swerdling initially served as a consultant, using his knowledge of financing convention hotels in other cities including Austin and Omaha.
Once Memphis Mayor Jim Strickland made it clear the city would not participate in financing a hotel, Swerdling changed his role to arranging the financing himself. That happened in recent weeks.
‘‘When I heard the city was not interested I immediately went to my capital sources,’’ Swerdling said.
In many cities, public agencies fund big convention hotels, but cash-strapped Memphis avoided committing tax money to a new hotel, although the hotel room sales tax was raised recently to help finance the $60 million upgrade planned for Cook Convention Center.
Financing a new hotel would require diverting a portion of the sales taxes collected in the hotel to paying off the construction debt, Swerdling said. The city also would be asked to contribute the site and build a new garage and lease it to the hotel.
Swerdling also would address the convention center issue of relatively limited space for smaller meetings. The new hotel would include 120,000 square feet in meeting space, an amount Swerdling said far exceeds the volume in typical convention hotels.
Strickland expressed tentative support Wednesday in an email to The Commercial Appeal.
“We’ve had multiple conversations in recent months with Mr. Swerdling about his proposal and we’re encouraged by the private sector’s interest in investing in Downtown,” the email says. “We know we need another large hotel and more meeting space near the convention center. We welcome the chance to discuss this with Mr. Swerdling or anyone else with a serious proposal to meet our need for more hotel rooms.”
Kane said he thought the prospect of a private developer investing $180 million in Memphis would most likely open the way for the city to assist Swerdling. In the early 1980s, Memphis similarly assisted in the construction of a new hotel next to the convention center. It is the 600-room Sheraton.
Memphis tourism officials for years have insisted the city’s lagging convention trade needs a new hotel of 500 or more rooms to attract trade groups that now favor other cities with 1,000-room convention hotels.
Putting up a 600-room hotel at the foot of Poplar would surpass that 1,000-room mark when adding in the 600-room Sheraton already standing next to the convention center.