Construction on convention center hotel was to start this summer
According to the Loews PILOT application, construction should’ve started this summer “or earlier if possible.”
Memphis City Councilman JB Smiley said the new hotel in his district got delayed due to financial complications from the pandemic.
“The lending markets are frozen as it relates to hotels,” Smiley said.
Jennifer Oswalt with the Downtown Memphis Commission also explained Loews had planning delays before the pandemic, especially once they decided to bring the vacant former Memphis Police building back to life.
“The site itself is difficult: working through building something tall like that in a site that has a garage underground at the moment, shoring that up, working with the historic building to keep that intact,” Oswalt said.
Outside Memphis, there are also mixed signs. The hotel chain announced layoffs in Orlando in August, but since then announced it’s opening two new hotels there in December. They also opened a new Loews in Kansas City in June.
Barbara Shelly is a freelance journalist who wrote about the new hotel in Kansas City.
“The lobby was very empty. It was strange,” she said.
Shelly also wrote about the financial challenge it’s presenting for Kansas City, which may have to pay $5 million out of pocket to make up for catering shortcomings this year.
“They gave Loews the catering contracts for the convention center it’s affiliated with and that’s supposed to be a revenue stream. But since there are no events to cater at the moment, the city is on the hook for that,” Shelly said.
While Memphis officials also gave Loews a tax incentive deal, taxpayers are not on the hook for any money, Oswalt said.
“They keep what they generate. They’re not taking from tourism activity but whatever sales tax they create from their hotel they get to reinvest and pay back debt on their project,” Oswalt said. “If it doesn’t perform, they’re liable. Not the city.”
“If the project is not done by 2024 it then expires,” Smiley said.
Oswalt said a coronavirus vaccine will be essential to the future of the hotel and the new convention center. Still, Loews has already adjusted expectations. In their PILOT application, Loews predicted their hotel would create 300 jobs, bring 60,000 new visitors to the city and spend $24 million a year.
“They’ve downsized the occupancy rates. Pre-COVID, we would’ve expected a much more vibrant and full hotel early on. Now may take a little longer,” Oswalt said.
“If everything works right and lending markets open back up in early 2021 then we are hopeful this project begins to unfold in mid 2021,” Smiley said. “I spoke with them briefly. They’re optimistic and hopeful.”
Loews Hotels officials released the following statement to WREG: “Loews Hotels & Co continues to work closely with the City of Memphis, our development partners and architects on a new hotel in downtown Memphis, while also navigating uncertainties associated with the Covid-19 pandemic.”
“They’re committed to Memphis and administration is committed and we want to see this get done,” Smiley said. “I’m excited!”
WREG asked Loews officials for an updated timetable for construction but they did not provide one.