Loeb Properties wants to build a $24.2 million hotel in Overton Square and wants a $3.3 million tax break to do it.
The project would be built on the surface parking lot that is now north of Hatiloo Theater and east of the Overton Square parking garage. The hotel would have 100 rooms, a rooftop restaurant, and structured parking.
All of this is according to documents issued by the Memphis and Shelby County Econcomic Development Growth Engine (EDGE) Friday afternoon.
Loeb president Bob Loeb said a hotel was needed there to help establish a regional theater district, in a September 7 letter to EDGE president Reid Dulberger.
“Unfortunately, it has become very clear that unless we dedicate the resources to make it happen, there will not be a hotel in Overton Square,” Loeb said in his letter.
Loeb engaged hotel consultants Pinkowski & Co. in December 2016 to help them find a hotel developer. Since then, they brought on LRC2 Properties and MMI Hotel Group as partners on the project.
However, “in order to make their project financially feasible,” Loeb is asking for a 15-year payment-in-lieu-of-taxes (PILOT) deal that would allow them to forgo a bit more than $3.3 million in local taxes.
“The project is not feasible without the PILOt benefit,” reads the project’s application.
The hotel would support 65 jobs with annual average salaries of $22,690. The general manager position at the top would make just below $70,000 and food and beverage staffers would make the lowest at $18,720 each year. All told, the hotel would pay about $1.9 million in wages here each year.
The hotel would yield about $5.4 million in tax revenues over the course of the 15-year PILOT and a $6.1 million “benefit to the applicant,” according to an EDGE staff report.
The project was supported in letters from Kevin Kane, president of the Memphis Convention and Visitors Bureau; Jackie Nichols, executive director of Playhouse on the Square; Sam Goff, president of the Midtown Memphis Development Corp.; and Ryan Watt, executive director of Indie Memphis.
EDGE members will consider the application on September 20.