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The Gaylord Palms Resort & Convention Center in Kissimmee Talking Major Expansion;
Seeking Tax Dollars for $188 million Addition of 360,000 Sq Ft of Convention Space,
 386 New Hotel Rooms and Culinary School

By Daphne Sashin, The Orlando Sentinel, Fla.McClatchy-Tribune Business News

Feb. 7, 2007 - --KISSIMMEE -- The Gaylord Palms Resort & Convention Center is once again floating the idea of a major expansion subsidized by Osceola's tourists.

Resort officials on Tuesday offered an early glimpse of the company's proposal to the Osceola Resort Area Council, the tourism task force of the Kissimmee-Osceola Chamber of Commerce, at the group's retreat.

The resort is looking for the county to chip in about $92 million toward the cost of adding about 360,000 square feet of convention center space, 386 new hotel rooms, a culinary school, nightclub, sports bar and parking garage, said Kemp Gallineau, the resort's senior vice president and general manager.

The county's contribution would amount to about 25 percent of the resort's overall expansion cost, Gallineau said. He and other Gaylord officials stressed that the proposal is in its early stages and they are not ready to present it to the County Commission.

The expansion would be a little smaller than the company proposed in 2005, when it wanted the county to help pay for 400,000 square feet of meeting space and 394 hotel rooms. But the price tag -- originally $188 million -- has risen dramatically because of rising construction costs.

Members of the resort council advised the company to figure out the total benefits to Osceola County and how the deal might be structured.

"The next step for us is to flesh out those questions," said Keith Salwoski, public relations manager for the resort.

Gaylord is expanding other resort properties with "significant help from each of the cities we're in," Gallineau said. Because the company typically rotates meeting groups through its properties, having larger convention space in Washington, D.C., Memphis and Texas will create a demand for more space in Osceola.

"If [the Osceola] convention center doesn't grow along with the rest, than Osceola County could miss out on those groups," Salwoski said.

The county in 1998 struck a 30-year deal to give Gaylord $90 million in tax incentives to build its original hotel. That money, which comes from tourist taxes collected by the hotel, is being used for construction and marketing to promote the county and the hotel.

Several projects are contending for a chunk of the tourist taxes that were originally intended to build a county convention center.

The county in 2004 began collecting a sixth penny on the bed tax to help pay for the project, but in 2005 stopped convention center plans.

As of October, the sixth penny had generated about $12.05 million.

Chamber of Commerce president Mike Horner said the county needs to figure out how much it will get for its investments.

"These tax dollars are just as important as property-tax dollars and any other tax dollars generated and need to be treated carefully," Horner said. "This isn't free money."

Daphne Sashin can be reached at dsashin@orlandosentinel.comor 407-931-5944.

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Copyright (c) 2007, The Orlando Sentinel, Fla.

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