Remembering the Marketplace of the Midsouth

Wilson World Hotel at The Mall of Memphis

Hotel Targets Single Workers Developers look for affordable extended stays to fill gap here

July 4, 2004

A San Diego-based developer with Memphis ties has purchased the former Wilson World Hotel and Wilson Inn and Suites near the Mall of Memphis and converted the buildings into a low-cost extended stay hotel.

The Tom Hom Group purchased the two hotels, which have operated as a single Days Inn since 2002, from the Kemmons Wilson Cos. for $2.7 million on June 29.

The hotel switched to the extended-stay Campaige Place the next day.

"We've already had some tenants move in," said Tom Hom, president Will Newbern. "It was part of our strategy not to close the property."

Campaige Place will target single service industry workers seeking a reasonably priced, clean and secure place to live. Newbern, a Memphis native and White Station High School graduate, said the product has done well in Las Vegas, which has a population of service workers with similar demographics as those found in Memphis but a lot more affordable housing.

"Memphis, which does not have the quantity or quality of housing for single service industry workers, is going to be very ripe for us," he said.

Rooms rent for $100 a week or $400 a month.

Included in the rent is a fully furnished unit with a small kitchenette, refrigerator, microwave, telephone service, cable and weekly housekeeping.

Tom Hom began developing single room occupancy hotels in 1997 and has hotels in San Diego and Las Vegas and one under construction in Phoenix.

"In the three markets we're in right now . . . we have focused on doing properties with a certain level of government assistance and have primarily focused on service industry worker housing," Newbern said.

The Memphis property will focus on service industry workers, but no government incentives will be used.

Newbern said Tom Hom has moved away from using government incentives because of the difficulty in obtaining them and because many service industry workers don't qualify for the various programs.

That decision has spurred Tom Hom to look for renovation and conversion opportunities as opposed to new construction.

"This is the first time in about 20 years we have taken over an existing property and converted it to our use," Newbern said of the nearly 30-year-old company. "All of the other properties that are in our portfolio are currently ones that we built ourselves." Newbern said the buildings are in good shape and require very little work other than security enhancements.

"We'll be spending a quarter of a million dollars on upgrading security on the building," Newbern said. The 170-room Wilson World Hotel opened in 1986. The 107-room Wilson Inn and Suites at 2705 Cherry Road opened in 1989.

Although the combined hotel was never officially listed, Kemmons Wilson Cos. vice president Paul McClure said the company had been looking for a buyer for some time.

"As the mall suffered so did we," said Kemmons Wilson Cos. vice president Paul McClure. "When the mall was doing very well back in the late 1980s and early 1990s it had been a very profitable hotel, and it just wasn't any longer."

Occupancy in the combined Days Inn was just 40 percent in 2003, down from 43 percent in 2002. McClure said he believed Tom Hom's product would be good for the community around the Mall of Memphis and would certainly be better than the alternative.

"Anything that's vacant is not good for the area," he said. "We had stayed in it as long as we could."

Newbern said Tom Hom isn't worried about the future of the mall and is optimistic it will be redeveloped.

"There is nothing that can happen to the mall at this point that can hurt our investment," he said. "It is at rock bottom. Whatever happens to the mall will be an enhancement to our property."

- Kate Miller Morton: 529-2351 Copyright 2004, commercialappeal.com - Memphis, TN. All Rights Reserved.


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