A city consultant and the CEO of the Charlotte Regional Visitors Authority said Monday that discussions on a 1,000-room convention hotel will likely shift to selecting a site and beginning talks with prospective developers this summer. Those plans surfaced during a presentation to City Council that outlined anticipated funding needs for a slew of projects in the next five years to be paid for using existing tourism taxes.
Tom Murray, the visitors authority executive, last year told CBJ and industry leaders that a convention hotel would make Charlotte more competitive when recruiting conferences and conventions. He reiterated on Monday the need for a large-scale hotel under the tourism arm’s control, allowing the city to contract large room blocks at discounted rates to attract conventions.
Though he declined to disclose specific sites, Murray said it would be preferable to locate land adjacent to the convention center. The convention center, opened in 1995, is located on College Street, bounded by Stonewall and Brevard streets and Martin Luther King Jr. Boulevard.
Former city manager Ron Kimble, who has consulted on tourism projects since his retirement in January 2017, told council, “We also have had conversations with you, with the community, that have been in the media regarding the need for a 1,000-room hotel that would rise all tides and raise all boats in the hospitality industry and bring new, bigger conventions to Charlotte.”
No specific amounts were mentioned, but, based on precedents established in similarly sized cities, public money would likely account for 30% or more of a convention hotel. Assuming 1,000 rooms, construction would be in the range of $350 million, meaning $100 million or more could be sought from taxpayers.
Rival cities including Austin, Baltimore, Cleveland, Indianapolis, Louisville and Nashville have all planned or opened similar projects with significant public money.
“We’ve got make sure we stay competitive in the marketplace,” Kimble said. “There will be an action coming to you sometime this summer regarding the opportunity to partner on an upgrade to the convention center that will also involve the possibility of a new 1,000-room hotel.”
Last year, council approved spending $110 million on convention center renovations and expansion to be repaid using a portion of existing tourism tax revenue. A final vote on the construction contracts will be taken this fall.
Construction is slated to begin next winter and be finished in 2021.
Murray emphasized in a discussion with reporters after the presentation that no agreements have been reached with a hotel developer. A site idea will likely be brought to council later this year.
In a presentation last year to industry executives, Murray and others asserted a convention hotel would help existing hotels, citing industry data from rival cities that have recently opened similar projects. The visitors authority CEO pointed to 93 consecutive months of industry growth in Charlotte as proof there is enough demand to absorb a 1,000-room hotel.
The city’s first convention hotel, a 700-room Westin, opened in 2003. City money accounted for $16 million of that project’s $143 million cost. In return, city government received use of 500 of the 1,600 parking spaces in an adjacent deck as well as some of the hotel’s conference rooms.
“Ideally, it would be adjacent,” Murray said of a 1,000-hotel room. No hotel brands or representatives have been contacted yet, he added.
Charlotte has seen a proliferation of new hotels opened or planned in recent years, including an increase of 5.6% in the number of rooms during the past year.
The city is considered the likely choice to land the 2020 Republican National Convention since other anticipated contenders declined to submit bids. Last year, Charlotte hosted the PGA Championship and, in February 2019, the NBA All-Star Game will be here. The Democratic National Convention came to Charlotte in 2012.
Murray said those successes point to more growth and opportunity in the years ahead — opportunity that requires more rooms and convention space to be fully realized. LaWana Mayfield, a council Democrat, wondered aloud why public investment is needed when private companies are already building hotels without government investment or encouragement. Kimble referred to the need for the visitors authority to have control of blocks of rooms in one location at reduced prices, an offer that is much easier to make for a subsidized hotel.
“You have spent wisely, you have spent and invested strategically,” Kimble told council during his presentation, summing up tourism tax spending commitments. “You’ve invested where you get the greatest return on the input of the revenues for the assets built. I would say past City Councils have been extremely, extremely successful in creating return on investment.”