At their regularly scheduled meeting held today, the Tyler City Council voted unanimously to enter into two professional service contracts to continue work to bring a full service hotel conference center to Tyler.  The first contract is with GT Development, L.L.C., who will act as program manager to represent the City; the second contract is with Champ Hospitality who will seek private equity to develop the hotel portion of this project.

 “The hotel conference center is a public-private partnership, with the City primarily funding the conference center and private investment constructing the hotel,” said Tyler Mayor Martin Heines.  “Bringing Champ and GT together to work on this project will give Tyler the best possible chance of bringing this project to fruition.”

 The conference center will be located on city-owned property adjacent to the new Village at Cumberland Park retail development at Broadway and Loop 49.  The City owns 17.97 acres, a portion of which will be leased to the hotel developer for the project. The site will also feature a 3.7 acre lake.

 The City took the  initial step toward exploring the possibility of constructing a hotel conference center in 2011 when Senator Kevin Eltife and Representative Chuck Hopson sponsored and carried bills to amend the Texas Tax Code to allow for an additional two percent hotel occupancy tax to be collected within Tyler city limits.  An enabling Ordinance was then passed by the City Council for the additional two percent to be used for the construction, expansion, maintenance or operation of convention center facilities, which may include a conference/convention center, multi-purpose facility, arena or related facility.  Approximately $600,000 annually is generated by this additional two percent.

 Then, in November 2011, the Tyler City Council voted to hire a consulting team to evaluate the feasibility of the facility.  Garfield Traub Developments (and PKF Consulting USA as its subcontractor) was hired to conduct a market and feasibility study for two projects: a conference center and an arena. The consultants found that Tyler is uniquely positioned to attract private investors for the construction and management of a full-service hotel conference center.   Further, they went on to prioritize potential sites for the facility.

 “The hotel conference center will be a public-private partnership with more than two-thirds of the funding coming from private investment,” said Heines.  “Only a small portion of this project would be public funds – and those would come from hotel tax revenue.”

 The budget for the project will not be finalized until the design is complete and bids are obtained; however, it is estimated to be around $55-60 million.  The City’s portion will not exceed $17 million.

 The proposed conference center hotel is anticipated to generate new hotel occupancy tax income for the City, in addition to new sales tax revenue and property tax income.  The hotel could provide up to 250 rooms and the conference center could offer 26,000 square feet of meeting space. More details and actual scope would depend upon the design that is yet to be completed.  The City would reserve the right to approvals of private ownership, hotel brand, professional services from architects/contractors, and project budgets, should the project proceed after an estimated six-month period for pre-development work.

 “Most conferences would need significantly more hotel rooms than the 250 incorporated into the project,” added Heines.  “The overflow would utilize room inventory in the community, thus benefiting our existing hotels.”

 Tourism was identified as one of Tyler’s chief opportunities for economic growth in the Industry Growth Initiative that was adopted in mid-2010.  It is estimated that at least 32,816 room nights are lost each year because Tyler has not had the facilities to accommodate large conferences.

 “Tourism brings fresh dollars to our economy,” explained Heines.  “This is money from outside our region being spent in Tyler.  The result is jobs for Tylerites and economic vitality.”

 GT Development, L.L.C. has more than 30 years of experience in developing hotels, including designing, financing, securing equity, construction and operations. They also have experience with all major brands, including Marriott, Hilton, Hyatt, Sheraton and its various select brands. GT will represent the City’s interests and investment in the project by providing oversight of the pre-development process and through construction completion.  This will include reviewing design, construction, financing, selection of the hotel operator and flag.

 Champ Hospitality representatives Joe Champ and Charlie Maas each have more than 32 years of experience in the hospitality industry. Champ Hospitality has worked with all of the major brands.

Joe Champ has held senior management positions with Westin Hotels, Starwood Hotels and Resorts, Wyndham Worldwide and Interstate Hotels.  Joe founded Champ Hospitality in 2006 to bring together the disciplines of finance, development, branding and operational expertise to a single focused development organization. Since that time Champ has developed, or has under development, nine hotels. Champ is currently President of Gateway Hotel One, Ltd. and is leading the development of the Sheraton Hotel and Event Center in McKinney, Texas, which will open during the first quarter of 2015. The Sheraton McKinney Hotel is only one of two full-service hotels which have been constructed in the Dallas/ Fort Worth area in the past several years. It is one of only three successful public private hotel partnerships nationwide in the past two years.  Many are proposed, but few get built as they lack a successful financial structure.