MEMPHIS, Tenn. — The Grand Hyatt hotel project in the One Beale development may be moving forward again after the city and the developers reached a financing deal involving a $10 million contribution from the city.
“I am happy to announce that we have come to an agreement with the Grand Hyatt developers to build the hotel,” Memphis Mayor Jim Strickland said in a statement Thursday morning. “The deal greatly limits the City’s risk of financial loss and eliminates any impact on our bond rating and debt capacity.”
One Beale already contains hotels, restaurants and apartments at the foot of Beale Street. The fourth phase of the project plans to build a $154 million addition to the development.
Developer Chase Carlisle had asked the city to act as a financial backstop for the project, and Memphis city council chose to guarantee 100% funding to the developers.
But Strickland balked at the proposal, saying that deal was too much risk for the city.
Under the new deal, the city will make a $10 million advance lease payment to the Center City Revenue Finance Corporation, which the developer will receive in the form of a $10 million grant to be repaid in 10 years.
Strickland said the city is expected to receive $378,000 a year in additional tax revenue from the hotel during the term of its PILOT deal, and more than $1.5 million a year after that.
The deal will require approval from Memphis City Council.
“This is a win for the City of Memphis, and I look forward to the day when the Grand Hyatt transforms our skyline,” Strickland said.