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Jekyll Island Authority Adopts Financing Plan Allowing Development of the
200-room Westin and the 120-room Hyatt Place Hotels to Move Forward

By Nikki Wiley, The Brunswick News, Ga.McClatchy-Tribune Regional News

Nov. 20, 2012--Jekyll Island's proposed town center took a step closer to becoming a reality Monday.

Two planned hotels and the Beach Village retail center, all key parts of the island's multimillion dollar revitalization, received the green light after the board of the Jekyll Island Authority approved updated lease amendments and resolutions that will provide additional funding and allow developers to move forward. The documents were approved, pending further legal review.

"There are two hotels that were designed as part of the convention center village project," said Jones Hooks, executive director of the Jekyll Island Authority, which operates the state park. "I am very pleased to present today documents for you to consider that would actually move the Westin project forward."

The projects had been at a near standstill since September, when Hooks said the state would not be implementing immediately the Georgia Tourism Development Act, which was expected to provide a tax credit the Westin's developer needed to obtain bank financing.

Gov. Nathan Deal's office has since said the project would not have qualified for the credit because of a provision that prohibits a recipient from directly competing with other Georgia businesses and that Jekyll should not have expected that funding.

Both the 200-room Westin hotel and a 120-room Hyatt Place hotel will receive funding from the Jekyll Island Authority's newly created tourism development fund, which is funded by a 5 percent accommodations tax.

Both hotels will receive reimbursement for their marketing expenses from the fund that was created to stimulate and provide an incentive for the development of tourism projects on the island.

If the state does carry out the Georgia Tourism Development Act or a similar program, the hotels would be required to apply.

The board also approved allowing each hotel to hold less in its reserve funds to bring the businesses on par with their franchise requirements.

The Hampton Inn and Suites, built in early 2010 and developed by Jekyll Landmark Associates, the same firm as the planned Westin, will now be required to keep only 4 percent of its rental revenue in reserves, a reduction of 2 percentage points. The Westin will also keep less of its revenue.

The Hyatt Place also now has an operator. Phelps Development, the developer of the hotel, was left looking for an operator after the Chhatrala Group of San Diego backed out of its commitment.

Spherical Energy and Environmental Systems will take over Phelps Development's operational responsibilities.

Both hotels had their financial and construction deadlines extended Monday.

The Hyatt Place is now expected to be open by the end of 2013 or beginning of 2014, and the Westin is expected to be open by August 2014.

Both hotels were originally scheduled to begin construction earlier this year. Neither has broken ground.

The lack of hotel rooms on Jekyll Island has been an ongoing problem. Seven conventions have cancelled meeting plans for 2014, costing the authority $3.8 million.

Executive Director Hooks says he is optimistic that getting the Westin on track will prove beneficial to the convention center.

"Looking at the total impact of the Westin, it will be significant, as we know, to the island," Hooks said. "Obviously, it will be significant, as we know from the number of conventions that have already cancelled on us. It will be significant to the success of the convention center."

The two hotels will be constructed in close proximity to the convention center that opened in May and near what will become the Beach Village of shops and restaurants, forming a contemporary town center on the island.

After the authority cancelled its contract with the former developer of the retail center, Winding Road, because of financing trouble, the authority took on the project to develop itself and approved moving forward with drafting leases for potential tenants.

IGA Supermarket, Jekyll Realty, Parker-Kaufman Real Estate, Ameris Bank and Southeast Georgia Health System will all occupy a portion of the Beach Village if leases are approved by both the authority and potential tenants.

The IGA Supermarket is currently in operation on the island and the health system would provide an immediate care facility for island residents and visitors.

A leasing consultant hired by the authority is working to attract other tenants to the space.

"We could very easily end up with two or three proposals for the same place," Hooks said. "If we do, certainly we're going to be looking at the best proposals."

Jim Broadwell, project manager for the authority, told the board he hopes to request bids during the first part of next year for the construction of the retail center.


(c)2012 The Brunswick News (Brunswick, Ga.)

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