March 15, 2011--There's a new player on the downtown hotel scene -- again.

Fairwood Capital, an investment firm based in Memphis and New York, last week finalized a purchase of the Hilton Knoxville at 501 W. Church Ave.

Ed Ansbro, the firm's executive vice president, said Monday that Fairwood bought the 317-room hotel and that it will retain the Hilton brand. He said Davidson Hotels has taken over management of the property.

Ansbro declined to identify the sale price, but said the new owner plans to spend about $3 million on renovations. Ansbro said the Hilton is Fairwood's seventh property and that the firm likes markets with big state universities.

The 317-room Hilton previously was owned by an organization with ties to Denver-based investment firm J. Herzog and Sons.

According to a marketing brochure, its 2010 occupancy was 67.8 percent, with an average daily rate that year of $111.10.

The Hilton is only the latest downtown property to change hands in recent months. On the last day of 2009, a group led by Knoxville developer Nick Cazana bought the 293-room Holiday Inn Select at 525 Henley St. for $8.5 million, and subsequently launched an extensive renovation of the property. Meanwhile, a building that's home to the 28-room Hotel St. Oliver at 407 Union Ave. was sold in October to a group that is doing a major overhaul of the historic property.

Cazana said Monday that the Hilton deal is a good move for Knoxville "because the more quality hotel rooms we have, the more opportunity for conventions both large and small."

The Hilton opened in 1981 and was built along with the Radisson (now Crowne Plaza) at 401 W. Summit Hill Drive and the Holiday Inn Select initially to serve the 1982 World's Fair.

J. Herzog & Sons bought the Hilton in 2004 from The Hotel Group Inc. for $21 million. The Hotel Group bought the Hilton from Boykin Lodging Group in 2003 for $15.2 million. And in 1998, Boykin Lodging bought the Hilton Knoxville for about $20.6 million.

Business writer Josh Flory may be reached at 865-342-6994.

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