Jackson Free Press

This article is a revision of the story distributed through JFP Daily in order to clarify several points. See a revision explanation below the story.

City Council members at a work session this morning said they need more details about paying $14 million for the land for a convention center hotel. The city will purchase land from TCI, the company that will develop the hotel, but council members were frustrated by the lack of information about the land purchase. Currently, TCI owns the land, purchased in a deal brokered by former Mayor Frank Melton with friends from Texas who started TCI. The land, cross from the convention center, has stood undeveloped since the last administration with the company's finances and ability to complete the proposed development in limbo.

Council members saw a map from TCI of the property downtown that the city will buy, but some council members said the printing quality made it difficult to read. Mayor Harvey Johnson Jr. said he could not determine how many acres are in the parcel the city will buy, but he thought it would be nine to 10 acres, most of which is currently vacant.

"The public doesn't know how many acres we're acquiring," Ward 1 Councilman Quentin Whitwell said. "Help me help you. I can't argue something back to the public if I don't know. It can't be that complicated."

Whitwell also questioned how much TCI had initially paid for the land in 2007 and how much of the $14 million the city will pay for the land would go to the purchase price and how much to costs associated costs.

City financial consultant Bob Swerdling of Swerdling and Associates told the council members that they will get more details shortly. Ward 7 Councilwoman Margaret Barrett-Simon said she does not have answers to questions from people about the hotel.

"It's very difficult politically to be dealing with something like that if we are just getting details in ripples," she said.

In 2007, TCI got a $7 million loan from the Department of Housing and Urban Development to finance part of the property purchase. The Jackson Free Press reported in August that Brookins said TCI was behind on its HUD loan payments. Brookins could not comment this morning on whether the company is still behind on its payments, but said Jeff Wagner, the lawyer who is overseeing TCI's compliance on the HUD loan, will present more details to the council at a later date.

Brookins told the Jackson Free Press that the hotel's future revenue would pay off the loans TCI currently has on the land.

"If we float a bond to purchase the land and develop the hotel, then hopefully the hotel will pay off the debt," he said.

Also in August, JRA hired a financial consulting firm to conduct a feasibility study for the convention center hotel. JRA board members received a draft of the study last Wednesday, and the Jackson Free Press requested a copy of the study. At the time the Jackson Free Press made its request, JRA said it was not able to release the study to the public, but said it will comply with open-records laws when it receives the study.

CORRECTION APPENDED 10/3/11: A previous version of this article incorrectly identified Ward 1 Councilman Quentin Whitwell as JRA Director Jason Brookins in the photo caption. The story was not written or edited sufficiently to make it clear that TCI got a HUD loan in 2007 to help finance its original purchase of the land. It was also unclear in the Daily version that Bob Swerdling is a financial consultant for the city. The story also did not make the timeline of the land purchase clear or that it was a deal brokered by current Mayor Frank Melton. We apologize for the errors and lack of clarity of the original story.

Also see: Oct. 3 memo from Jackson Redevelopment Authority regarding TCI

Read the JFP's previous coverage of the convention center hotel plans:
Council Gets Hotel Details, Finally
Convention Hotel Developers Owe County Taxes
City May Help Fund Convention Center Hotel
[Editorial] Sun Must Shine on Convention Hotel Deal
The Saga of the Convention Center Hotel
City Approves Convention Hotel Financing
[Editorial] The Convention Hotel Conundrum
Convention Hotel Waits on Financing
Waiting for the Convention Center Hotel
City Not Ready To Finalize Hotel Plans
JRA Hires Consultant for Convention Hotel

JFP Stories from 2006 and 2007 about TCI/Gene Phillips:
The New Jackson
Why Isn't Gene Phillips Mentioned?
Phillips Group Close to Jackson Contracts?
Melton Flies to Phillips
Who Gets to Crown the King?

Related:
Measuring Progress: The Evolution of Downtown Jackson Partners

Previous Comments

ID

165103

Comment

Just to clarify, in 2007 the city administered the HUD loan to the developers, and last week council members expressed concerns about the city's liability for the loan if the developers do not pay it back.

Author

Lacey McLaughlin

Date

2011-10-03T12:53:13-06:00

ID

165105

Comment

I have revised several unclear points in the above story, which went out in today's Daily. It was edited and distributed while I was out of the office. I apologize for several unclear points in the story. I also suggest clicking on the links to our previous stories. This is a long saga that started during the Melton administration and that resulted in a Hobson's choice for the city in order to get the land across from the convention center developed into a hotel. The Jackson Free Press has warned for years that this hotel situation is a very sticky one -- and one that is hard to repair. We also reported and editorialized from the beginning that TCI, and other companies, associated with Gene Phillips might not be wisest ways to invest in downtown's future due to their rocky track record, but downtown cheerleaders raved on behalf of TCI and their big plan for the hotel. It is great to see that council members and others are suddenly worried about this situation, but here at the JFP, we really wish more people had had the foresight to see this one coming and paid a bit more attention sooner.

Author

DonnaLadd

Date

2011-10-03T15:27:33-06:00