Charlotte’s case for a convention center hotel

Driving the news: Last month, city council approved a plan for a land swap with a private developer that preserves land adjacent to the convention center for future development. Proponents say this is a key step toward a signature convention center hotel.

• As part of the deal, the city will give 1.9 acres of its property at 501 S. Caldwell St. to Berlin-based Millennium Venture Capital in exchange for 0.7 acres at 401 S. College St., as CBJ reported. (The developer recently closed on its deal to buy 401 S. College from Duke Energy).
• Because the city is giving away a bigger piece of land, MVC will demolish the building at South College and prepare the site for development, said Tom Murray, CEO of the Charlotte Regional Visitor’s Authority, the city’s tourism arm, per CBJ.

Why it matters: Charlotte aspires to be a world-class city that hosts world-class events, ones that draw thousands of out-of-town visitors who patronize local businesses. But in order to be more competitive in landing large-scale events, Charlotte needs more hotel rooms, hospitality leaders say.

• Think huge business conventions where attendees can easily walk to the convention center from their nearby hotels.

“The exchange also preserves a strategically important parcel adjacent to the Convention Center and should it be used for future hotel development, will improve our convention district hotel offerings, growing Charlotte’s competitiveness against cities we most often lose business to,” Murray said to council recently.

Zoom out: Charlotte has fewer hotel rooms in its city center (6,404) than its competitors, according to a presentation CRVA prepared for city council ahead of the Nov. 28 city council vote. Here’s how competitors stack up:

• Austin: 13,629
• Baltimore: 8,766
• Indianapolis: 8,487
• Louisville: 9,408
• Nashville: 20,108
• Tampa: 14,104

Charlotte also lags behind in the number of large hotels it has — meaning ones with 300 rooms or more, per CRVA.

• “Hotels with at least 300 rooms serve as a proxy for a market’s ability to accommodate city-wide convention business,” per the CRVA presentation.
• Charlotte has seven hotels with at least 300 rooms. Nashville, on the other hand, has 13. Austin has 11, Tampa has 10 and Indianapolis has eight.

Yes, but: Charlotte should be careful about what it decides to do with city-owned land, some officials say.

During the Nov. 28 meeting, for instance, city councilman James “Smuggie” Mitchell noted that the private sector has been driving hotel development without help from the city. “We should let the market drive that.”

• He questioned whether a hotel is “the best use”of city-owned land. Citizens ask me, why are you giving land away without a true community benefit?” he said.

Local tourism leaders told CBJ they’re in favor of a convention center hotel — but only if they come without public incentives.

• Major convention hotels of 800-1,000 rooms, CBJ reports, often include public subsidies equal to 30% to 35% of construction costs.

What’s next: The land swap transaction still needs to close. The planning and construction of a development like a hotel would then take years.