Convention center hotel to be sold

Joint venture to pay $67 million for Sheraton Memphis Downtown

The Memphis convention center hotel is slated to be sold for $67 million next week.

The 600-room Sheraton Memphis Downtown Hotel will remain a Sheraton after the sale to a joint venture of Louisville, Kentucky-based Schulte Hospitality Group and Starwood Capital Group.

Schulte will operate the hotel and hold a minority ownership stake, said Kevin Gallagher, president of Schulte. The seller is Host Hotels & Resorts L.P. Closing is scheduled for April 19.

The transaction came before public agencies Tuesday because the hotel stands on city-owned real estate under long-term lease. Opened in 1984 as the Holiday Inn Crowne Plaza, a full-service hotel connected to the Memphis Cook Convention Center, the hotel switched to Marriott in 1998 and Sheraton in 2013.

Downtown Memphis Commission president Terence Patterson said the investment sends a strong signal about the viability of Downtown’s north end.

The city has been working to expand and modernize the convention center, add new gateway features to welcome visitors and redevelop the Pinch district in conjunction with expansion by St. Jude Children’s Research Hospital.

A Sheraton expansion is one idea that has been promoted as a solution to Downtown’s lack of a convention center hotel capable of serving bigger conventions.

Gallagher declined comment on whether the sale might set the stage for expansion.

In a letter to the Center City Revenue Finance Corp., the hotel purchasers said, “Schulte and Starwood are excited to be part of the redevelopment of downtown Memphis and the neighboring Pinch District, working with the (convention center) through their upcoming renovation and preparing for the City’s bicentennial celebration in 2019.”

The letter said their “strategy for operating the hotel is to retain the existing staff, improve operational efficiencies as we have at the other 80 hotels we manage, and leverage our in-house sales and revenue management teams to drive more business to the hotel.”

Schulte is a hotel investment, development and management firm founded in 1999. Starwood Capital Group is a global private equity firm with $52 billion in assets under management. Starwood founded Starwood Hotels & Resorts, an unrelated hotel franchise and management firm with brands including Westin and Sheraton, which was recently bought by Marriott International.