City says Sheraton purchase is moving forward but asks two weeks to deliver documents and timeline

Chair Green called the Economic Development, Technology and Tourism Committee to order and asked the administration for an update on the proposed Sheraton Hotel acquisition and next steps. Antonio Adams, chief operating officer, and city attorneys including Andy Jones and Cheryl Hearn briefed the committee and answered council questions. Adams and Jones said multiple legal and operating agreements must be aligned before the city signs a purchase agreement and warned that signing too early would trigger a 30‑day closing deadline and risk a $1 million escrow forfeiture if the city could not close. Jones said the administration expects documents to be ready “by the end of this month” and was aiming for a closing no later than Sept. 15, with the Carlyle entities to take over short‑term operations and a third party nonprofit to receive the hotel for long‑term redevelopment. Jones cautioned that the transaction is more than a real‑estate sale: it covers an ongoing hotel business, a franchise agreement with Marriott, predevelopment and later transfer documents and tax‑exempt entity paperwork, and several lawyers and lenders must be coordinated.

Convention center officials told the committee they are losing events while the Sheraton remains in limbo. Dean Dennis, general manager of the Renaissance Convention Center, and Camille Wellington, director of sales, presented examples of clients who postponed or declined Memphis contracts because renovation timing for the Sheraton is unclear. Wellington provided the committee a fiscal‑year 2025 estimate showing about $6.4 million in potential economic impact lost to date that the convention center attributed to uncertainty about the hotel’s renovation and availability. Dennis said operators need a clear plan and dates to advise customers who book meetings a year or more in advance.

Council members pressed the administration on three points: (1) evidence of when the council approved the purchase (council members recalled October of the prior year), (2) whether the city is currently paying hotel operating costs (Deputy CFO Andre Walker said the city had not spent acquisition bond proceeds and the hotel’s operating expenses remain with the owner; the city does pay roughly $3.8 million annually in debt service on the bonds), and (3) why the transaction had not closed after nearly a year. Jones and Adams said the delay stems from typical M&A and franchise negotiations and the need to reconcile multiple draft documents rather than litigation: their explanation included that the seller, Starwood, had initially pressured for a year‑end resolution but later agreed to keep the property on its books rather than force a sale at auction. Jones reiterated that the city would not sign a legally binding purchase agreement until many interlocking documents read the same way to avoid future unexpected costs.

Council members requested more documentation in advance of the next committee meeting. Chair Green said she had received “exactly zero documents” in advance and ordered the administration and the city attorney’s office to provide written materials for council review. The committee agreed to reconvene on the item in two weeks; Chair Green said the administration should provide all material it can legally release and a clearer timeline for when renovations would begin after closing so the convention center can resume outreach to prospective clients. No formal action was taken by the committee at this meeting; the item was set for follow‑up.

Members of the committee and administration repeatedly emphasized the twin goals of getting the hotel into sound operation for the convention economy while avoiding signing documents that could lock the city into unfavorable terms. Adams and Jones said the plan, if documents are finalized as expected, is for the Carlyle management entities to run the hotel while they undertake predevelopment and negotiate final transfer to a nonprofit partner for long‑term renovation and operation. Jones said the steel‑franchise agreements and tax‑exempt entity paperwork remain among the most delicate pieces to align before a purchase agreement would be executed.

The committee will return to the Sheraton item at its next scheduled meeting and the administration said it would provide whatever documentation is legally possible to share in the interim so council members can review and bring constituent concerns back to the administration.