Mon
Aug 14 2017
12:24 pm
Knoxville Marriott foreclosed, to be sold at auction
By: R. Neal  shortURL

According to a foreclosure notice in today's paper, the owners of the Knoxville Marriott are in default on a loan and the property will be sold at auction on Sept. 5th on the courthouse steps. The property address listed in the notice is 501 East Hill Avenue, the tax parcel ID is 095IC00301. The notice gives Marriott International the right of first refusal.

UPDATE: It appears that owner Columbia Properties Knoxville, LLC is connected to Columbia Sussex, a hotel/casino operator with a string of recent foreclosures and casino bankruptcies. (link...) (link...)

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bizgrrl's picture

I hope it continues to be a

Submitted by bizgrrl on Mon, 2017/08/14 - 12:53pm.

I hope it continues to be a hotel. I think it is an asset to Knoxville. I really like the design of the building.

michael kaplan's picture

The hotel should be bought by

Submitted by michael kaplan on Mon, 2017/08/14 - 1:02pm.

The hotel should be bought by the city and county and converted into a downtown community center, something to replace the former Candy Factory ... the atrium would be a great venue for indoor music events.

R. Neal's picture

The county is already trying

Submitted by R. Neal on Mon, 2017/08/14 - 1:45pm.
(in reply to michael kaplan)

The county is already trying to unload at least one hotel they bought.

As for the Marriott, wonder how many people they employ and how much payroll they add to the local economy? Wonder how much they pay in local property, sales, room, liquor, etc. taxes?

Or, maybe you were not being serious?

michael kaplan's picture

As for the Marriott, wonder

Submitted by michael kaplan on Tue, 2017/08/15 - 10:36am.
(in reply to R. Neal)

As for the Marriott, wonder how many people they employ and how much payroll they add to the local economy? Wonder how much they pay in local property, sales, room, liquor, etc. taxes?

A bankrupt hotel isn't a great model of 'economic development.'

But .. should those be the principal parameters for development, what a project generates in jobs and taxes? How about what a project provides in social and cultural amenities?

The area of the Candy Factory is now a dead zone, with only KMA attracting visitors on any scale. The 11th Street Cafe and the Community Center, along with the Victorians and KMA, could have been developed as the hub of a downtown arts center. And with the development of the Factory into artists' lofts on the top floors, it could have even made money for the city/county.

Somebody's picture

Mariott

Submitted by Somebody on Tue, 2017/08/15 - 4:27pm.
(in reply to michael kaplan)

If I were to hazard a guess, it would be that the people currently working at the Mariott are probably hoping that it will continue to operate as a hotel. The people who have stays booked there probably hope the same thing. It appears they're still taking reservations, so I'll bet it's open and employing people right this very moment! But you know, maybe you don't care about working people, so long as you can get your candy factory back.

Also, acoustically speaking, that atrium is likely a terrible location for indoor music events.

Sandra Clark's picture

Good catch, Randy

Submitted by Sandra Clark on Mon, 2017/08/14 - 2:37pm.

Ever thought about being a reporter?

R. Neal's picture

Hah. Actually, there was a

Submitted by R. Neal on Mon, 2017/08/14 - 3:08pm.
(in reply to Sandra Clark)

Hah. Actually, there was a tip. But I guess reporters have sources?

Anyway, surprised the Sentinel hasn't mentioned it. Maybe they don't read their own paper.

michael kaplan's picture

I've heard several

Submitted by michael kaplan on Tue, 2017/08/15 - 3:49pm.

I've heard several suggestions for re-use of the building, including:

1) House the homeless. That would be a spectacle.

2) Sell off the rooms one by one to AirBnB entrepreneurs.

3) Convert the hotel into a hostel, as the Danish do with their older center-city hotels.

It would be interesting to hear Jack Neely's history of the building, including what it replaced and what tax incentives went into its creation, if any ...

Michael's picture

Don't forget...

Submitted by Michael on Tue, 2017/08/15 - 11:14am.

...that there's a new Marriot going up on State Street.
~m.

michael kaplan's picture

so, through bankruptcy,

Submitted by michael kaplan on Tue, 2017/08/15 - 3:51pm.
(in reply to Michael)

so, through bankruptcy, they're dumping the old one on taxpayers?

R. Neal's picture

It's not bankruptcy. It's

Submitted by R. Neal on Tue, 2017/08/15 - 3:57pm.
(in reply to michael kaplan)

It's not bankruptcy. It's default on a loan. The bank now owns it. The bank will now sell it. Doubtful that taxpayers will buy it.

The two projects are not connected that I know of.

Who is "they?"

Marriott doesn't own and did not own the existing hotel.

bizgrrl's picture

I like the location of the

Submitted by bizgrrl on Tue, 2017/08/15 - 4:32pm.
(in reply to Michael)

I like the location of the existing Marriott, river view.

bizgrrl's picture

It appears the Marriott is

Submitted by bizgrrl on Sat, 2017/09/16 - 6:12am.

It appears the Marriott is now under new ownership, I Square Management, Little Rock, AR.

According to a report from WATE, employees are having trouble getting their final pay checks from the previous owners.

A representative with the Tennessee Department of Labor confirmed Columbia Sussex has 21 days to pay employees, as long as no one from the prior company is involved with the new company that took ownership.

Somebody's picture

I'm glad the new company is

Submitted by Somebody on Sat, 2017/09/16 - 1:42pm.
(in reply to bizgrrl)

I'm glad the new company is advancing funds to their employees to bridge the gap created by the previous owner. That speaks well of the new folks. Of course it's in their own interest, too, as they need their employees to keep coming to work. Amazing how being decent to your employees can also be good for the company. They should teach that in MBA school.

On another note, it appears, alas, that keeping those hotel employees on the job is going to put a real crimp in the plans hatched upthread to turn that building into a giant community meeting room and unlistenable indoor concert space. Better luck next time.

michael kaplan's picture

I wonder if the original

Submitted by michael kaplan on Sat, 2017/09/16 - 3:18pm.

I wonder if the original owner (Hyatt?) received tax incentives to build the hotel in the first place ...

barker's picture

Earl Worsham

Submitted by barker on Sun, 2017/09/17 - 3:00pm.
(in reply to michael kaplan)

Earl Worsham was the developer of the hotel property. It was part of the infamous Morningside urban renewal project of the 60s and 70s that also included the Safety Building and the Civic Auditorium and Coliseum.

My understanding of the nuts and bolts of how urban renewal projects worked back then is a little sketchy, but essentially local housing authorities used federal funds to buy neighborhoods filled with blighted properties through eminent domain. This, of course, displaced hundred or thousands of low-income residents, mostly African Americans, and businesses. The housing authorities then cleared the land (demolished all the buildings, in other words), and sold the property to developers at a price below market value. Other than the reduced sale price, I don't know if other incentives were involved.

bizgrrl's picture

Worshsm, that name brings

Submitted by bizgrrl on Sun, 2017/09/17 - 8:52pm.
(in reply to barker)

Worshsm, that name brings back memories. Forty plus years, that's a pretty good run.

michael kaplan's picture

Thanks, good info. The legal

Submitted by michael kaplan on Sun, 2017/09/17 - 10:32pm.
(in reply to barker)

Thanks, good info. The legal definition of 'blighted property' remains the basis of the modern 'redevelopment plan,' which is why citizens should be cautious about its application to any populated neighborhood. And the Supreme Court decision in Kelo v. City of New London opens the way for new Morningsides, where commercial 'economic development' can be considered more valuable than single-family residential.

I wonder if there is any scholarly research/documentation (masters or doctoral thesis) on the Morningside Urban Renewal project. I know Bob Booker has mentioned it on occasion,

barker's picture

Morningside

Submitted by barker on Sun, 2017/09/17 - 11:30pm.
(in reply to michael kaplan)

Before I replied earlier, I did a down-and-dirty internet search on the project to see if I could find out about incentives. I found this UT thesis on the displacement of minority-owned businesses:

(link...),

This is another UT thesis on the more general effects of urban renewal:

(link...)

I'm sure you could find more with a more in-depth search.

michael kaplan's picture

Thanks. I glanced at Corner

Submitted by michael kaplan on Mon, 2017/09/18 - 9:18am.
(in reply to barker)

Thanks. I glanced at Corner Taylor's thesis and it looks like a serious and valuable piece of work. Look forward to reading it in its entirety. I can just imagine what I-40 destroyed -- we've seen the more recent consequences of its widening as 'SmartFix.'

Taylor's thesis, by the way, was written under the tutelage of the Graduate School of Planning, which was absorbed into the College of Architecture, then disbanded. During my last few years at UT, I had some interaction with the department, and was always impressed by their professionalism.

I had a friend living in New York's Greenwich Village who was the victim of 'gentrification' resulting in significantly higher rent for the apartment he had lived in for fifty years. He called the process 'economic cleansing.'

Rachel's picture

Ah, the late, great School of

Submitted by Rachel on Mon, 2017/09/18 - 12:33pm.
(in reply to michael kaplan)

Ah, the late, great School of Planning. I managed to get a Master's before it was sacrificed for Marlene Davis's landscape architecture program.

barker's picture

Booker

Submitted by barker on Sun, 2017/09/17 - 11:32pm.
(in reply to michael kaplan)

And Bob Booker is an invaluable resource. Give him a shout at the Beck Center and I'm sure he would have a wealth of information for you. He doesn't do email, so you'd have to call the center.

bizgrrl's picture

WBIR reports, Delta Hotels by

Submitted by bizgrrl on Thu, 2018/02/08 - 7:03am.

WBIR reports,

Delta Hotels by Marriott announced Tuesday that it will convert the Knoxville Marriott hotel into a Delta Hotels by Marriott. It will be the first one of its kind to open in the State of Tennessee.
...
According to the release, owner and management company, I Square Management, LLC, out of Little Rock, Arkansas, will transform the hotel with a multimillion dollar renovation expected to restore the soaring 12 story lobby, guest rooms and all convention and public space.

Delta Hotels was a Canadian chain purchased by Marriott in 2015.

From Marriott, Delta Hotels, Simple made perfect.

Good for I Square Management and Marriott. IMHO, this hotel is an asset to downtown Knoxville.

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