New owner seeks incentive to replace Benchmark
A Rhode Island hotel developer proposes to raze the gutted former Benchmark Hotel and replace it with a 170room, four-star hotel.
A Downtown board, the Center City Revenue Finance Corp., is being asked to consider a tax incentive for the nearly $43 million project.
The new project follows intense scrutiny of the building’s blighted condition by Shelby County Environmental Court.
Nashville-area firm MNR Hospitality closed the Benchmark in 2011, gutted the structure and planned to use the shell as the basis for a new limited-service, 124room hotel.
But the property sat deteriorating on a prominent corner facing AutoZone Park and The Peabody, and Environmental Court declared it a nuisance in February.
MNR reached an agreement in March to sell the property to MHF Memphis VI LLC of Warwick, Rhode Island. The new owner, Magna Hospitality Group, plans to tear down the remaining structure and put up a full-service hotel.
Memphis hospitality consultant Chuck Pinkowski said the development would be a welcome addition to the area.
“It’s a fantastic location, and if it’s going to be a four-star hotel, that’s great. It certainly fits in with The Peabody better than what it was as the Benchmark. It’s going to be high quality and I think that’s great.”
A staff report said construction is planned to begin in the first three months of 2019 and be completed a year later.
“Remediating the blighted condition of the former Benchmark Hotel has been a top priority for the DMC (Downtown Memphis Commission) over the past 18-24 months,” the report said.
The larger project falls within the Downtown agency’s 3-year-old hotel policy, which says tax incentives for hotel projects should be reserved for larg-
er, full-service hotels. The MNR project was deemed too small to qualify for an incentive.
The new owner is recommended for a 15-year property tax abatement. The tax incentive application doesn’t state a hotel brand, but Magna is an approved franchisee for Hilton Hotels, Marriott International, Hyatt Hotels and InterContinental Hotel Group.
The application says Magna owns or manages 38 hotels with more than 5,800 rooms and valued at more than $1.5 billion.
Plans call for a five-story hotel that utilizes existing basement parking and features 1,500 square feet of meeting space and a ground-floor restaurant and bar at Union and B.B. King Boulevard.
The DMC staff estimates the incentive would yield an “estimated hypothetical” tax savings of $7.28 million over 15 years for the owner while generating a $2.43 million increase in city and county property taxes.