|By Wayne Risher, The Commercial Appeal,
Memphis, Tenn.McClatchy-Tribune Regional News
September 10, 2010 -- Memphis Bioworks Foundation officials hope to transform the old Medical Center Holiday Inn into a 167-room extended-stay hotel with a fresh new look in two years.
Thursday's announcement of a $2 million federal grant was hailed as a taxpayer-funded stimulus for the $33.8 million project that will create 126 permanent jobs.
"An old, brown building will become a green building," Mayor A C Wharton said. "I've always been a big believer that a dollar should serve more than one purpose. It's a research dollar, it's an education dollar, it's a healing dollar and it's a jobs dollar."
The city secured the Brownfields Economic Development Initiative Grant from the Department of Housing and Urban Development to assist with environmental issues including asbestos removal from the 40-year-old building at Madison and Pauline.
"The hotel project is an interesting project," said Rep. Steve Cohen, D-Memphis, who recalled the structure's double duty as a Holiday Inn and offices for U.S. Bankruptcy Court. "It is indeed a sore spot in the community, and that's what Brownfields grants are all about."
President and executive director Steve Bares said the grant paves the way for the Bioworks Foundation to nail down the final piece of project funding, about $17 million in debt.
The foundation has owned the 20-story building since 2005 and considered demolishing it along with the Baptist Memorial Hospital complex.
"We thought clearly there's got to be a use for this hotel," Bares said. "You can't have a research park without having the support functions, and a hotel is integral to that."
In addition to UT Baptist Research Park, the hotel would serve the University of Tennessee Health Science Center and nearby Methodist University Hospital, Medical Education and Research Institute, Regional Medical Center at Memphis and Le Bonheur Children's Hospital.
Brandon Wellford, chief financial officer of Bioworks, said about $6 million to $7 million in private equity would be brought to the deal by Equinox Partners, a California investment group.
Equinox and Bioworks officials have been in conversations with Hyatt Hotel Corp. about redeveloping the building as a Hyatt Summerfield Suites.
The Holiday Inn occupied the top five floors, with offices on lower floors; the new concept calls for hotel rooms on floors eight through 20, said project architect John Pruett of John Pruett Architects.
The hotel will feature a new seventh-floor lobby and patio garden areas on top of the existing 470-space parking deck. A pool and recreation area on the roof would be upgraded.
Memphis lodging industry consultant Chuck Pinkowski said developments planned in the UT Baptist Research Park would create the hotel's demand.
"I think the demand this facility will be looking to is what the biotech center will create, not necessarily what's there now," he said. "Every building is going to create some amount of demand for lodging."
Pinkowski said the nearest Summerfield Suites are in Atlanta and Dallas.
"It's an apartment-type of hotel. It's designed to serve markets for trainings, sales meetings, two- or three-week programs or longer, where people share a suite."
--Wayne Risher: 529-2874
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