City hears proposal to spend $4M-$6M for hotel near center

Published 12:00 am Wednesday, October 16, 2002

[10/15/02]Vicksburg officials have heard a pitch to allocate $4 million to $6 million to a company that would build a downtown hotel for the Vicksburg Convention Center.

The rest of the cost would come from private sources, representatives of Innisfree Hotels and Strategic Advisory Group said.

“We absolutely believe we can raise the money,” responded Mayor Laurence Leyens.

The 5-year-old convention center was turned over to a private management firm two years ago, and bookings are increasing. The $13 million project still requires a hefty annual supplement from the city’s general fund, however, and having a nearby hotel has been cited as an idea to increase use of the center’s facilities.

Innisfree is a business development company based in Gulf Breeze, Fla. SAG is a consulting group from Duluth, Ga.

Clay Dickinson of SAG said a study of the Vicksburg market will show if a convention center hotel is feasible. Based on previous studies, he said he believes a 125-room hotel could be built adjacent to the convention center for about $12.5 million and meet the needs of the center.

The city would need to come up with half the money, he said.

“We’re not going to invest money if it doesn’t make sense,” Leyens said, “but if it does, we’ll find it.”

Larry Gawronski, center director for Compass Facilities Management, said the idea is a good one.

“A hotel can only help the convention center, and the convention center can only help a hotel,” Gawronski said.

“We lose probably half of the calls that we get here or the leads that we find because we lack the hotel,” he added.

Gawronski said the 50,000-square-foot meeting space at the convention center can comfortably hold about 700 convention-goers, but that most of the bookings there have been limited to one-day conventions or spectator events such as the annual Miss Mississippi Pageant.

Leyens said the city can help fund the project in a number of ways, including a general obligation bond issue or raising money through private donations.

Under the agreement reached to date, SAG will conduct a marketing analysis, which will cost the city nothing if the project moves forward. If Vicksburg rejects SAG and Innisfree’s proposal, then the city will pay SAG half the cost of the study, or about $15,000.

The center’s budget gets revenue from rental fees and food sales at events plus a 2 percent tax on rooms rented by the night in Vicksburg and cash from the general fund. The budget for this year projects expenses of about $2.2 million with a city supplement of about $1.2 million including $410,000 generated from the 2 percent tax.