After its fight against the Loews Hotel failed in court, the owner of the Downtown Sheraton could expand its existing hotel by up to 300 rooms and give the hotel a substantial renovation.

Those potential millions in investment would become another piece in northern Downtown Memphis’ ongoing transformation. The Renasant Convention Center has a new name and is getting a $200 million renovation. The $242 million Loews Hotel is planned to pop up nearby.

Schulte Hospitality Group, one of the owners of the Downtown Sheraton, came to Memphis City Council on Tuesday to discuss plans for such an expansion — a plan that it pitched to the City of Memphis in 2018 as a competing proposal with Loews for the second convention center hotel. The city ended up choosing Loews to redevelop city-owned land on Civic Center Plaza.

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The Sheraton fought the Loews deal in court, arguing that Memphis Mayor Jim Strickland’s administration, the City Council and the State of Tennessee Building Commission acted illegally when they proposed and approved incentives for the project. It also argued the market would struggle to sustain two convention center hotels.

Now that legal peace has ensued, the Sheraton has decided to pursue, or at least weigh heavily, expanding itself. If the Sheraton expands and Loews is built as planned, Memphis will have added more than 800 convention center hotel rooms — rooms intended to serve those using the Renasant Convention Center.

The proposed Sheraton expansion is part of a settlement agreement among the City of Memphis, Loews and the owners of the Sheraton that followed the litigation of the past year.

Under the terms of the agreement, the City of Memphis agreed to help the Sheraton obtain what is known as a tourism surcharge — a 5% tax on all rooms sold. That tax would be used to pay down debt incurred by the potential expansion. The CA obtained the settlement agreement.

Also included in the settlement agreement is what is essentially a non-disparagement clause between Loews and the Sheraton. If either hotel group is asked about the other, they are to say that the other is "additive" to the Memphis hotel market.

At present the Sheraton land is publicly owned and the property has a zero dollar annual lease. Under the proposed expansion, the land would either have a tax increment financing district or have a PILOT (payment in lieu of taxes) and the Sheraton would eventually obtain ownership of the land. It would begin to pay property tax revenue to the city, which it doesn't do at present.

Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter @samhardiman.