Mayor offers tax incentives for two new hotels near Music City Center

Mayor Karl Dean has committed tax incentives to two separate developers planning full-service, 400-room-plus hotels south of Broadway to help fill the anticipated lodging demand of Music City Center.

Metro Finance Director Rich Riebeling confirmed Thursday that the city has offered incentives to Denver-based Swerdling & Associates, which is planning a luxury 450-room, $150 million Hyatt hotel near 2nd and Broadway, and Nashville developer Tony Giarratana, who has proposed a 400-room Marriott Hotel at 8th Avenue and Demonbreun Street.

Both deals, contingent on the developers first finalizing private deals for the projects, would be valued at less than $5 million each through a combination of tax increment-financing and property tax abatement.

To land the incentives, the hotel would also have to agree to a room-block agreement with Metro to accommodate attendees at Music City Center events.

?If they get the financing in place, Metro?s assistance will be available,? Riebeling said, stressing a private deal must be presented first.

Both projects could conceivably receive incentives under the arrangement laid out by Dean?s administration.

For the past year, developers have been circling Music City Center, eying properties for a second full-service hotel to add to the new 800-room Omni Hotel slated to open in October.

Giarratana has a contract to buy the Eighth Avenue property from First Baptist Church Nashville for $11 million if he secures financing to build what could be a $120 million hotel.

Swerdling, meanwhile, is looking to build a Hyatt at the same Lower Broadway property where a Westin deal fell apart six years ago.

Hyatt Hotels Corp. is already constructing a 255-room hotel on Third Avenue south of Broadway. A rendering of the Hyatt?s next downtown plans, prepared by Earl Swensson & Architects, shows a building with lots of glass that would sit directly on historic Broadway between 2nd and 3rd avenues. Hyatt.

Bob Swerdling, managing director of Swerdling & Associates, said Nashville?s ?home grown entertainment district, make this a place we want to be,? adding that Hyatt is the only hotel operating company that has no presence in the Nashville area.

An unidentified developer has floated the possibility of a Westin Hotel near the city?s new Roundabout on Eighth Avenue. The fact that Metro has identified Swerdling and Giarratana could signal that the Westin push has stalled.

Offering incentives to hotel developers is consistent with an approach Dean?s administration has embraced to spur company expansions and relocation. But the city?s investment would be miniscule compared to the private-public deal it approved for Omni to serve as anchor hotel for the new center.

Metro?s package for the $287 million hotel was worth $128 million in incentive payments, property tax breaks and reimbursement for land acquisition.

This is a developing story. Check back for more new details.

Source: http://www.tennessean.com/article/20130711/BUSINESS/307120022/2275/RSS05

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