|By Amos Maki, The Commercial Appeal,
Knight Ridder/Tribune Business News
Dec. 1, 2005 - Financing for the planned $40 million Westin Beale Street Hotel -- one of the largest Downtown projects announced last year, located between Second and Third streets directly across from FedExForum -- has been secured.
The 9-story hotel, which is being developed by Nashville-based Senate Hospitality Group, will feature 203 rooms, a Starbucks and a Daily Grill restaurant. The Daily Grill is a California-based chain similar to Houston's that specializes in classic American cuisine.
The founding partners on the project are Glenn Malone and Dave Jones of Senate Hospitality and Greg Hnedak and Kirk Bobo of Memphis-based architecture firm Hnedak Bobo Group.
"We are finished with our financing efforts and ready to move forward," said Malone, chief operating officer for Senate Hospitality Group, which is planning a press conference next week to discuss the project. "We feel like Downtown Memphis is calling out for a high-quality, upscale hotel and that's what we bring with the Westin Beale Street."
City officials were thrilled at the news.
"This will be an important anchor for the continued economic development of Downtown Memphis," said Memphis Mayor Willie Herenton.
"I think this is a pivotal project," said Jeff Sanford, president of the Center City Commission. "I think it's pivotal because it brings a important hotel flag to the market in support of not only FedEx Forum, but a recently expanded Cook Convention Center, which, in my opinion, creates a need for more hotel rooms."
First Tennessee bank is the senior lender, along with Trustmark Bank and other private equity investors including AutoZone founder J. R. 'Pitt' Hyde III.
A portion of the funding includes federal New Market Tax Credits provided by a wholly owned subsidiary of Seedco called the Empowerment Reinvestment Fund IV. New Market Tax Credits are designed to spur investment in low-income communities.
Seedco, a nonprofit based in New York, operates an affordable housing program and a benefits screening service in Memphis.
ERF IV sold $15.5 million in tax credits to help reduce financing costs and provide resources for job training and retention services. Trustmark purchased the tax credits and the developers are using the proceeds from the sale of the tax credits to finance a portion of the project.
Seedco will team with its local partners to provide job training and other education opportunities for future employees.
"The idea is to try to help folks do better in the workforce," said Kenneth Brezenoff, who represented Seedco Financial Services in the deal. "By doing that, it helps them stay on the job and develop a career ladder."
The hotel is part of a larger development that includes a garage that will be attached to the hotel. The complex will be called Lee's Landing, named after Lt. George W. Lee, the black Memphian who received the French Croix de Guerre medal for bravery in World War I and was the "political boss" of Beale from the 1920s to the 1950s.
Earlier this year, John Elkington of Performa Entertainment Real Estate said that financing for the 525-car parking garage was moving forward. The first floor of the garage will include 14,000 square feet of retail, including a Ground Zero Club, a Clarksdale, Miss.-based juke-joint and restaurant partly owned by actor Morgan Freeman.
"It's going to be a great project for Downtown," said Malone.
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