Why Charlotte is unlikely to land convention hotel site before year end

The timetable for acquiring a site to build a proposed, 1,000-room convention hotel in Charlotte is likely to be pushed back by at least several months as tourism executives focus on higher priorities, a city consultant told CBJ on Monday.

In May, as part of a presentation on investments targeted by the Charlotte Regional Visitors Authority, Ron Kimble, a consultant to the tourism agency, said City Council would be asked to consider options for a convention hotel — a long-discussed project anticipated to include a request for $100 million in taxpayer money to help pay for construction costs.

Kimble told me Monday afternoon that his previous remarks about a possible consideration this summer by council involve buying and preparing a site. Now, he said, it looks like council and the visitors authority will push those conversations to the end of this year or early in 2019.

“We also have had conversations with you, with the community that have been in media regarding the need for a 1,000-room hotel, a Convention Center hotel in this community that would raise all tides and raise all boats in the hospitality industry and bring new bigger conventions to Charlotte,” Kimble, a former deputy city manager and interim city manager, told council on May 14. “Our competition in Nashville, in Indianapolis, in Louisville, in Fort Worth, in Austin are building and partnering on these 1,000-room hotels, and we’ve got to make sure that we stay competitive in the marketplace. 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 adjacent to the Convention Center.”

CBJ reported in May the visitors authority expects to spend as much as $30 million to buy the land and prepare the site for a convention hotel. If council approves public funding for a convention hotel, the money would be repaid using a portion of existing tourism tax revenue.

Kimble told me the convention hotel proposal is likely to take shape next year, following an upcoming six- to seven-month period of settling several more pressing priorities. Those priorities are:

• Contributing $8 million from existing tourism tax money to help pay for a proposed, $84 million hotel and conference center on the UNC Charlotte campus. Council is expected to vote Aug. 27 on possible city investment.

• Determining the parameters of the next round of improvements and renovations at the NFL stadium in uptown. The Carolina Panthers own the 74,000-seat stadium, but city government paid for $75 million of the team’s $177 million, five-year stadium facelift started in 2014. New team owner David Tepper is expected to request additional public money for additional improvements. Kimble has used $75 million as a “placeholder” figure for what the city might agree to pay.

• Winning approval for yet-to-be-negotiated construction contracts to begin work on $110 million worth of convention center renovations previously endorsed by the council.

• Determining the schedule, scope and other details for an estimated $30 million worth of improvements at the city-owned Discovery Place Science museum in uptown Charlotte.

Kimble said the slight shift in timing for buying the hotel site won’t delay the project because a developer wasn’t going to be selected until 2019 anyway.  

Tom Murray, visitors authority CEO, has said the best location for a 1,000-room hotel is near the convention center, located on College Street and bounded by Stonewall and Brevard streets and Martin Luther King Jr. Boulevard.

Supporters of a 1,000-room hotel cite the need for event planners to be able to negotiate discounted room rates with minimal hassle and at one location (as opposed to multiple hotels) as keys to landing more conventions. The largest hotel in Charlotte is the 700-room Westin, opened in 2003.

Some council members have questioned public investment in a convention hotel, saying it undercuts private hotel developers and operators. Murray and the visitors authority, citing examples and analysis from similar-sized cities, say a convention hotel would bring in and target a different audience, leaving ample demand for other hotels.

“I’m trying to understand why would that be an opportunity for Charlotte to participate in when we have hotels built every day and they are built through the private sector,” LaWana Mayfield, a council Democrat, told Kimble during his earlier presentation. “So, why, just because of its location and proximity to the convention center, why would we identify hospitality and tourism dollars to build a hotel when we have hotels being built all over this city that benefit the airport and so many others?”

Kimble told Mayfield a convention hotel would allow planners to reserve as many as 700 or 800 rooms years in advance and at more attractive rates. Private operators are less willing to risk blocking off a large number or all of their rooms at prices that might wind up being much lower than the going rate.

Regardless of whether the land was in place this summer, there was no way the 1,000-room hotel would have opened in time for the 2020 Republican National Convention. Cleveland opened a 600-room, $275 million Hilton — paid for by the county — just before the city hosted the 2016 RNC. Charlotte was selected as the 2020 convention site last month.

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