Apr. 2, 2008 - BILOXI -- McElroy's restaurant may be coming back to the Biloxi Small Craft Harbor and bringing a four star, $90 million Wyndham hotel with it.

The City Council on Tuesday unanimously authorized Mayor A.J. Holloway to enter contract negotiations with Wyndham Hotel Group and Mickey McElroy to lease city-owned land at the harbor adjacent to Hard Rock Casino.

McElroy has 20 years remaining on his lease with the city. His restaurant, which he operated at the harbor for more than 35 years, was destroyed by Hurricane Katrina. The new McElroy's Seafood Restaurant will have a spot on the first level of the new hotel, next to the lobby.

Plans call for the Wyndham Harbour Pointe Resort to have 400 hotel rooms and suites in a 24-story tower, with the top few levels sold as private condos. Kyle Gagne, senior director of financing and managed sales for Wyndham Hotel Group, said the resort will have a four diamond restaurant, room service, catering, a spa, fitness center, high-end retail, concierge floor and meeting space.

Some of the hotel rooms will have balconies to take advantage of the views out toward the Gulf and the hotel will be circled by a brick pedestrian terrace that will double as a fire lane. The hotel footprint won't take any of the small craft and commercial harbors, and guests will be able to see the shrimp boats and take charter boat rides to the islands and fishing trips.

That local flavor is what Wyndham customers are looking for, Gagne said. "We want to make this happen. Here. This location has to be the one," Gagne said. Since the Wyndham won't have a casino, the hotel would benefit from overflow guests from the neighboring Hard Rock and Beau Rivage casino resorts without competing with them.

Local developer Steve Drown would build the project over about two years, with Wyndham managing the resort. Gagne said the Wyndham timeshare division is also "extremely interested in Biloxi," and is looking at sites close to the harbor to build a resort to pair with the hotel.

Authorizing Holloway to negotiate with the developers isn't saying the city is approving the project, said Councilman Bill Stallworth. Both the mayor and council have concerns with traffic and keeping city control of the harbors, which will need to be worked out in the negotiations.

The proposed lease would require a $2 million rent payment up front on a $150,000-per-year lease and 1 percent of the resort's profits paid to the city of Biloxi, said Councilman Mike Fitzpatrick.

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