Memphis City Council approves Tourism Development Zone money for new convention center hotel

Daniel Connolly | Memphis Commercial Appeal

The Memphis City Council voted 8-0 on Tuesday evening to create a new Tourism Development Zone to help pay for a big new convention hotel in Downtown. And the council also voted to approve a 5 percent surcharge on the sale of goods and services within the hotel.

Here's how the Tourism Development Zone works: The Memphis Center City Revenue Finance Corporation will issue bonds to pay for the hotel.

A portion of the sales taxes within the Tourism Development Zone will flow toward paying off those bonds.

More: Shelby County saw $3.5B in tourism spending in 2017 as Tennessee sets record

Jennifer Oswalt with the Downtown Memphis Commission says those sales taxes only come from "new" taxes related to economic growth spurred by the hotel.

The plans for the TDZ are subject to approval from the state government.

The 26-story hotel is planned for Downtown along North Main Street near the Cook Convention Center.

Developers had earlier discussed the possibility of turning 100 North Main into a hotel, but decided instead to renovate that 37-story office tower for retail and office space.

More: Renovation rather than razing expected for 100 North Main

The development projects are led by New York-based Townhouse Management Co. in cooperation with the company Loews Hotels & Co.

Reach reporter Daniel Connolly at 529-5296, daniel.connolly@commercialappeal.com, or on Twitter at @danielconnolly.