Backstreet hotel out
Huntsville's $37M package insufficient, developer says

Source: Times Business Writer [email protected]
Huntsville Times
By GINA HANNAH

The development company working with two members of the Backstreet Boys is no longer pursuing a downtown hotel, the developer said Thursday.

Martin Belz, chairman of Memphis-based Peabody Hotel Group, said in a telephone interview that his firm's offer to build a full-service hotel next to the Von Braun Center was off, "unless the city changes their mind about what they're going to do."

Belz said the city's $37 million incentive package was not enough "in terms of the quality and the type of hotel we would want to do."

Belz's comments came shortly after Kevin Richardson of the Backstreet Boys and Rick Baker of Huntsville, Richardson's financial adviser, met with a couple dozen business leaders to rally support for a project that would include a hotel and entertainment center.

"We have everything squared away with that property," Richardson said during an interview, referring to the Heart of Huntsville at MarketSquare mall, the proposed site for the entertainment center.

"We're kind of waiting to see how the hotel negotiations are going to go, before anything else, because the hotel could and would play a big part in the entire project."

Peabody was one of eight developers to submit letters of interest to the city for a downtown hotel. The city is still looking at financial and other information submitted by all the companies before asking a few finalists to submit bids, said Joe Vallely, the city's economic development director.

Thursday afternoon, Richardson and fellow Backstreet Boy Howie Dorough held a press conference at Madison Square Mall to talk about their vision for the entertainment center, which would be similar but a bit smaller than Peabody Place in Memphis.

Richardson told the crowd of about 200 fans that he and Dorough met with the mayor earlier that day, "and she's very excited about the project."

Asked how much the entertainment center would cost to build, he said, "a lot - and we need the city's help."

The singers said it would take about two years from the ground- breaking to complete the project.

The city's involvement in a private hotel venture downtown has been a sticking point for years. In 1994, the city agreed to spend about $7 million on an Embassy Suites, then backed out after some residents protested. The developer sued, and the city wound up settling for $500,000.

Belz Enterprises, parent company of the Peabody Hotel Group, has a history of leveraging large projects with public money. The Commercial Appeal in Memphis has reported that $1 out of every $4 spent on Peabody Place came from public money, primarily federal zero- interest loans that the developer will repay.

Huntsville's incentive package for a downtown hotel includes a 2.5- acre site, meeting and parking space, and road improvements.

"We've got opportunities to do things all over the country, but we've looked for places that have really unique structure such as downtown Huntsville has with that civic center there," Richardson said. He said he'd like to see the channel near the hotel site developed so it would be similar to the Riverwalk in San Antonio.

The Huntsville entertainment center, which would be named Backstreet, "is just a really classy, well-put-together concept," he said. "I want to be involved creatively as well as bringing our entertainment contacts to the table to do something really special, and making an entertainment complex for the entire family."

Local developer Scott McLain, who owns MarketSquare mall, said he met with Bruce Burrow, principal of Belz-Burrow Development Group, who was also in town Thursday. Belz-Burrow, based in Little Rock, Ark., is a retail development company run by Burrow and Belz.

"I think we both still think well of each other and are both inclined to explore something that makes economic sense for us and for Huntsville," McLain said Thursday night.

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