News Summary
Memphis has signed a consulting contract with Capstone Development to redevelop the Downtown Sheraton Hotel. The city is set to acquire the property for $22 million, with an additional $8 million allocated for renovations. As the largest hotel in the area, the Sheraton’s revival is critical for boosting the local tourism industry, which contributes significantly to the city’s economy. Local leaders will manage the property during renovations, aiming to restore its appeal as a venue for larger conventions and events.
Memphis has taken a significant step in the redevelopment of the Downtown Sheraton Hotel by signing a consulting contract with Capstone Development, a Maryland-based hotel advisory firm. This new partnership is part of the city’s broader initiative to acquire and revitalize the hotel, which represents a critical component of the local tourism infrastructure.
The City of Memphis is set to acquire the Downtown Sheraton for $22 million, supported by an additional $8 million budget for necessary renovations. The Sheraton, currently the largest hotel in the area, boasts 600 rooms, but only 400 are usable due to poor conditions within the property. As renovations are planned, Capstone Development will provide advisory services for a monthly fee of $4,000 until November 2025. Their role will focus on ensuring compliance with hotel flag agreements and guiding the project to completion.
The Downtown Memphis Commission has formed a tax-exempt 501(c)(3) organization named “250 North Main LLC” to manage the property during a two-year engineering study. This strategy allows the city to own the hotel temporarily before transferring it to a nonprofit experienced in municipal redevelopment. Local business leaders, including Chance Carlisle, Carolyn Hardy, and Tyrone Burroughs, will oversee operations during this interim period, ensuring the property remains intact while plans for its restoration are finalized.
The acquisition of the Sheraton comes in the context of a broader effort to position Memphis as a prime destination for larger conventions and events. Despite the hotel’s prime location and large number of rooms, the property has faced challenges that have hindered its appeal. The last significant renovation occurred in 2004, and modern upgrades are required to enhance its attractiveness, particularly in light of renovations to the nearby Renasant Convention Center.
Since being placed on the market in February 2024, the Sheraton’s current ownership group, Hotel Memphis LP, had originally sought $43 million for the property. However, following a strategic assessment, the City of Memphis has opted for a more budget-friendly route, addressing the urgent need for extensive renovations. The city anticipates receiving $1.5 million from tourism surcharge revenue funds to assist with earnest money and other associated closing costs of the sale.
Memphis tourism is a $4 billion industry, making the redevelopment of the Sheraton not only crucial for local economic growth but also for maintaining Memphis’ status as a travel destination. Local officials understand that the Sheraton plays a vital role in supporting the area’s tourism infrastructure, which is expected to benefit significantly from improvements to the hotel’s facilities.
The Sheraton, built in the 1980s, is crucial for attracting larger events and conventions to Memphis. The city aims to maintain the property for two years in order to fully assess its potential before transitioning it to nonprofit management. Previous owners planned a substantial $200 million renovation that included a new hotel tower, illustrating the significant investment required to restore the Sheraton to its former glory.
In summary, the City of Memphis is poised to undertake substantial redevelopment efforts for the Downtown Sheraton Hotel. Through the expertise of Capstone Development and the collaboration of local business leaders, the city seeks to revitalize this essential component of the tourism sector, ensuring it meets modern standards and appeals to a broader range of visitors and events in the future.
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Additional Resources
- Action News 5: City Hiring Consulting Firm for Downtown Sheraton Project
- Wikipedia: Memphis
- Daily Memphian: Memphis Made Bond Payments for a Hotel It Doesn’t Own
- Google Search: Memphis Sheraton Hotel renovation
- Commercial Appeal: Sheraton Memphis Downtown Hotel for Sale
- Google Scholar: Memphis tourism industry
- Commercial Appeal: AutoZone Park Secures Renovation Funding
- Encyclopedia Britannica: Memphis conventions
- Action News 5: $100M Plan for New Liberty Park Renovations
- Google News: Memphis hotel renovation
