City administration schedules Sheraton hotel closing for Nov. 5; council demands public details on nonprofit operator and financing

The City of Memphis administration told the Economic Development, Tourism and Technology Committee on Oct. 7 that a purchase and sale agreement for the Sheraton Hotel was executed Oct. 2 and that closing is scheduled for Nov. 5.

April Gostick, assistant city attorney, reported the agreement date and closing schedule. Committee members asked for more public detail about the structure of the transaction and the nonprofit and operator the administration said would be involved.

Councilwoman Cooper Sutton said community members want to know the identities of nonprofit board members, the nonprofit’s IRS Form 990, whether there is a credible operator or pass‑through entity, and whether the nonprofit will assume any debt (committee members referenced a figure of roughly $42 million in prior discussion). The committee chair said those questions should be answered in public unless attorney‑client privilege applies and suggested the administration provide written responses in time for the council to review before closing.

CFO Walter Person told the committee the city has paid “over $4,000,000” in debt service to date and that the next payment is due at the end of the month; committee members observed that a November closing would leave the city having paid roughly $8 million in debt service before taking ownership.

Council members emphasized the need for public reporting because of the scale of taxpayer exposure (committee members repeatedly framed the issue as stewardship of roughly $30 million in city funding tied to the deal) and asked that the administration return to the committee after closing with written answers to the board, operator, financing and leaseback questions. The chair indicated the item will be returned to a November council meeting so the committee can review finalized documentation.

What it means: The administration has set a near‑term closing date; council members seek more granular public information about the nonprofit counterparty, any operators, debt obligations and whether a leaseback or private operator will assume ongoing hotel operations. Committee members expressed willingness to review privileged material in closed session if necessary but said core details should be available publicly around the closing.

Action/referral: Committee voted to reschedule the item for the November meeting cycle so members can review documentation and receive written responses to community questions.