I am happy to announce that we have come to an agreement with the Grand Hyatt developers to build the hotel. The deal greatly limits the City’s risk of financial loss and eliminates any impact on our bond rating and debt capacity. Instead of a guaranty or backstop of $79 million of bonds, the City will make an advance lease payment of $10 million to the City Revenue Finance Corporation (CCRFC) to facilitate this transaction, and the developers will receive a grant of up to $10 million from CCRFC to be repaid in 10 years.
It should be noted that City government will receive additional property taxes from this hotel during the term of the PILOT of $378,000 per year. After the PILOT expires property tax payments go up to $1,512,000 per year.
We’ll be asking our City Council for their approval at their earliest convenience.
This is a win for the City of Memphis, and I look forward to the day when the Grand Hyatt transforms our skyline.
-Mayor Jim Strickland