|By April Hunt, The Orlando Sentinel, Fla.|
Knight Ridder/Tribune Business News
Aug. 3, 2004 -Osceola County's decade-long dream of a convention center got a rude awakening Monday when the developer withdrew its proposal for the $350 million project.
FaulknerUSA President Mark Schultz said the credit markets would not bless the convention center-hotel complex, so there was no need to drag out negotiations.
County commissioners voted to shelve the proposal, and Schultz said the firm would instead try to pull financing together on its own.
Although the move leaves the door open for this proposal and others, county officials said the idea is dead -- for now.
"Absent a board direction, my staff are not examining any convention-center deals," County Manager Ed Hunzeker said. "We're getting back to the business of government."
The county has spent a year and a half negotiating with Faulkner for a complex at Osceola Parkway and State Road 535 near the Orange County line.
The plan calls for an 800-room hotel attached to the center to make enough money to cover the center's operating losses and still turn a profit.
Right until Monday's meeting, though, it was unclear how much the complex would cost, even though the county was assuming nearly all of the debt.
The issue has become election fodder, with challengers for the board's three contested seats vowing to kill the project.
With such pressure, it is unlikely that the issue will reappear on the political landscape before November. That means the eleventh-hour proposal by the Gaylord Palms Resort, asking the county to help expand its existing convention space to create a facility with 1 million square feet of exhibition and meeting space, is on hold, too.
Gaylord officials, who proposed putting up $66 million of their own money with a county loan of $140 million, said they were so surprised by Monday's development that they don't mind a break.
"We need some time to look at the situation now that it's changed, and I expect the county will need to do the same," Gaylord spokesman Keith Salwoski said. "It would be best for everyone to take a breather."
Commissioners have suggested the time be spent working to repeal the sixth penny of resort taxes that was to help pay for the Faulkner project. A workshop is expected before the fiscal year begins Oct. 1.
Some commissioners also want to examine other ways to use the other 5 cents of taxes on hotels and short-term rentals that can help the U.S. Highway 192 tourist corridor.
"It's time to go down a new road," said Commission Chairman Ken Shipley, who hoped to force a vote Monday to dump Faulkner, although he did not appear to have the needed three votes.
"We need to look at the resort taxes and see how much we can give to every hotel as a rebate, for upgrades, demolition or other improvements," he said. "If a convention center is going to be done, let private business do it."
Lack of private financing played a role in sinking the county's two previous attempts to build a convention center, but the idea has been resurrected over and over because county officials think the project will lure business travelers to even out its dependence on family tourists.
Even with county and company officials echoing the statement that credit markets would not qualify all of the deal for investment-grade bonds, there were hints that the issue would come back.
"I certainly hope you can work out the information and get a package for us to vote 'yes' or 'no' on," Commissioner Atlee Mercer said. "I still think the concept has strong merits."
One expert who questioned the financial assumptions of the proposal said he doesn't think the deal will resurface soon. Abe Pizam, director of the hospitality school at the University of Central Florida, said banks or financiers who do their own studies are likely to see the project just wouldn't be profitable.
"If anyone looks at it realistically, you come to the quick conclusion you might be building a white elephant," Pizam said.
The business community and tourism officials, who have pressed for a convention center since the mid-1990s, had mixed reactions.
Kissimmee/Osceola Chamber President Mike Horner, who has been one of the most vocal proponents for a convention center, said he would be open to debating ideas other than such a facility.
Janak Desai, owner of the 60-room Baymont Inn on U.S. 192, said he was disappointed and hoped another plan would come together soon.
The Kissimmee Hotel-Motel Association, made up of similar owners and managers of other small hotels, has been the only tourism group in Osceola to endorse the Faulkner plan.
"We are back to square one," Desai said. "I am hoping that it's not over."
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