In just over six weeks, Tyler officials hope to have identified partners interested in helping the city build a hotel conference center.
On Wednesday, Champ Hospitality, the firm looking to find a public sector partner for Tyler’s proposed hotel conference center, came before the Tyler City Council to request more time to find an equity firm and a debt holder for the project.
“We found a lack of interest in talking about a new project in the last quarter of 2016,” said Joe Champ, president of Champ Hospitality. “This is not uncommon to want to commit capital allocations before the last quarter of the year. The last quarter is used to close up deals before the year ends.”
Another holdup was economic uncertainty during a contentious national election, but now those fears have largely gone away.
“I do want to emphasize that lack of interest was not deal-specific,” he told council members Wednesday. “It was transaction-specific. There was also effect of a contentious election.”
In September, the city signed a memorandum of understanding with Champ Hospitality related to the development of a hotel and conference center, which is proposed to be constructed near the intersection of South Broadway Avenue and Toll 49. The purpose of the memorandum is to summarize the terms for the conference center.
In the memorandum’s financing section, Champ was given 120 days to get two letters of intent signed - one with an equity group and another for financing. Those deadlines were for Jan. 12 and March 13. At the request of Champ, the council extended the deadlines by just over 45 days. The decision was granted with a 6-1 vote, with Councilmember Darryl Bowdre as the lone nay.
Those deadlines will now be March 1 for the equity group and May 1 for a letter of intent for financing the project.
Champ said large New York and global investors were not interested in the project in Tyler, but state-level investors are showing more interest. Champ said he had positive conversations with investors in northeast Texas and hopes to have good news for the council in another 45 days.
“They understand Tyler is not a big market or a metro market, but in a lot of ways that presents a real opportunity,” Champ said.
Champ also hopes for good news in finding a hotel operator, adding Marriott and Starwood hotels recently merged. Champ said he has been engaged with Marriott on other projects, and said it would bring strength to the project if the company opted to become the operator of the hotel.
The signed memorandum of understanding outlines Aloft Hotels by Starwood as a potential hotel operator.
“Everything I see, I like it,” Champ said. “I think it will be positive for that brand.”
A hotel conference center has been a dream of the city since 2010, and the city estimates more than 20,000 hotel stays are lost annually due to a lack of facilities to accommodate larger conferences.
The conference center will be on city-owned property adjacent to the new Village at Cumberland Park retail development at Broadway Avenue and Toll 49. Tyler owns 17.97 acres, a portion of which will be leased to the hotel developer for the project.
The memorandum indicates the hotel will have at least 203 rooms. The conference center will be 29,000 square feet, with a 10,000-square-foot ballroom and at least 5,000 square feet of smaller meeting space.