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(NASHVILLE, TN) -- Country music capital Nashville thinks big--even if it always doesn't have the glint of cold cash to back up the blueprints.

Today, the city's Metro Development and Housing Agency's board chose Colorado-based Phelps Development and Atlanta-based Portman Holdings to develop a $300 million, 1,000-room, 40-story hotel to complement the planned $595 million, 1.2-million-square-foot downtown convention center.

The city doesn't have the money to pay for either project but local officials anticipate a private financing plan will evolve before any ground-breaking date is set.

Ten national developers submitted bids for the hotel project, according to Metro Finance Director Rich Riebeling.

The hotel would be built on a 2.4-acre site owned by Tower Investments, another member of the Phelps-Portman development team. The hotel site is south of the Country Music Hall of Fame and next to the convention center site.

Riebeling says Phelps and Portman have built hotels together in San Diego, Atlanta, Charlotte, New York, Orlando, Denver and other cities. Ten of their projects have 1,000 or more rooms. Portman designs the buildings. Phelps, a subsidiary of Hensel Phelps Construction Co., builds them.

Two local contractors, R.C. Mathews and Morgan & Morgan, and local architects Earl Swensson Associates will assist the principal firms.

Walt Baker, CEO of the Greater Nashville Hotel & Lodging Association, says the new hotel would be the city's second largest, next to the 2,900-room  Gaylord Opryland Resort & Convention Center .

The Renaissance Hotel, attached to the existing downtown convention center, has 649 rooms

MDHA Executive Director Phil Ryan told the agency's board he would recommend a hotel brand in a month or two, after consulting with the developers.

Ryan says the hotel, including stores, restaurants and about 100,000 square feet of meeting space and ballrooms, could be financed with a mix of public and private money or entirely with public dollars.
 
But Riebeling, Metro's finance director, says he favors  a public-private financing mix.  Urban America, a national  real estate private equity firm, is also searching for financing possibilities.

Ryan says  the Phelps-Portman team proposed to contribute $70 million upfront and take on $160 million in debt. The developers  asked the city for the other $70 million.

The public assistance could come in the form of tax-increment financing, which uses the increase in property tax revenue generated by a new building to help pay off the developer's debt, Ryan says.

The Metro Council recently approved Mayor Karl Dean's plan to spend up to $75 million to buy land for the convention center site. But a financing plan for the convention center is months away, according to local officials.

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