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Augusta, Georgia Could Lose $25 million Planned Hyatt if
 City Commissioners Don't End Stalemate Over Events Center

By Tim Rausch and Johnny Edwards, The Augusta Chronicle, Ga.McClatchy-Tribune Regional News

Aug. 12, 2009--Augusta could lose a planned $25 million Hyatt hotel if city commissioners don't settle their differences on the exhibition center/inner-city revitalization deal by month's end, say two men involved in the deal.

Local business leader Julian Osbon and developer Courtland Dusseau are urging commissioners to end their stalemate by Aug. 31, when contracts to purchase the four properties that would make up the hotel site expire.

Mr. Dusseau, managing partner for Alabama-based Legacy Hospitality, said he can't get the Hyatt Place Hotel & Business Center financed unless the trade, exhibit and event center is built on nearby Reynolds Street. Mr. Osbon, owner of one of the four properties, says he won't extend his land contract in September; it has been extended twice since being signed in January 2008.

He launched a public information campaign this week, starting with a memo to the mayor and the 10 commissioners and an attached flier reading, "Urgent Community Alert: Time is of the Essence."

"I don't think all the people understand the consequences," Mr. Osbon said Tuesday. "I wanted to make sure that if we did lose the hotel, that everyone had an opportunity to consider the possibilities."

Several commissioners and Mayor Deke Copenhaver said Tuesday that they weren't aware of the Aug. 31 expiration date but that they hope an agreement can be reached.

Black city commissioners who have opposed floating bonds to raise more money for the so-called TEE center said they resent being blamed for the possible loss of a hotel, but they can vote yes if they have a guarantee on when the Laney-Walker and Bethlehem neighborhoods will get installments on a projected $37.5 million in hotel fees.

"Right now they're using the TEE center to say that it's the reason why a lot of stuff isn't getting done," Commissioner J.R. Hatney said. "Nobody's trying to stop the TEE center from being built. We're just looking for an equitable finance plan between the TEE center and Laney-Walker and Bethlehem."

The commission has been at an impasse since early May over the TEE center and inner-city revitalization project, both of which are to be funded through a $1-a-night hotel fee implemented in 2008. The TEE center was approved by voters for $20 million in the 2005 special-purpose local option sales tax referendum, but it took almost two years for the commission to approve a site and operating agreement, which happened after Commissioner Don Grantham got a sixth vote from Commissioner Betty Beard with the inner-city revitalization deal.

Now the TEE center's cost is estimated at $38 million, not including a parking deck estimated to cost $12 million to $17 million.

City Administrator Fred Russell's initial funding proposal, which involved a combination of bonds and rerouted revenue streams, failed May 5 by a 5-4-1 vote, with the split falling along racial lines. Tensions escalated in the ensuing weeks, with one special-called meeting canceled for lack of attendance, another boycotted by half of the commission and the black commissioners calling a news conference to say they won't "succumb to fear, threats or intimidation."

Since then, the commission has voted to allow Mr. Russell to take only small steps forward on the project.

Mr. Russell said Tuesday that to move the TEE center and Laney-Walker/Bethlehem projects forward, he needs votes to approve bonding, approval of the operating contract, approval of a $1 million loan to keep the inner-city projects going forward in the short run and permission to purchase property.

According to Mr. Osbon, the Hyatt would be a 135-room hotel with a 22,500-square-foot office building and underground parking. During its first year of operation, it is estimated to generate about $368,000 in property taxes and $454,000 in sales and lodging taxes, Mr. Osbon said, with a 25-year economic impact of $215 million.

Commissioner Joe Jackson has put the TEE center issue on the agenda for Tuesday's meeting. He said it's time to quit with the baby steps.

"This could potentially cost us millions of dollars by not moving on this," Mr. Jackson said. "It's going to put black people to work. It's (going to) put white people to work. It's (going to) put Augusta to work."

Though he's willing to work toward a resolution, Commissioner Corey Johnson said he won't do so out of fear of losing the hotel.

"I don't think it's us that lost it," Mr. Johnson said of the Hyatt. "You can't lose what you never had. We lost the Golf and Gardens. So many things in this city have been lost because they haven't been planned."

Mr. Dusseau was on the phone with commissioners Tuesday in an effort to get the TEE center project moving again.

"I'm just trying to do something that will help the whole community, no matter what district it's in," Mr. Dusseau said. "To me this is not a political deal; it is an economic deal."

Mr. Dusseau said Legacy Hospitality picked Augusta not only for its big events, such as the Masters Tournament and Augusta Futurity, but also because of the TEE Center's potential convention traffic.

Reach Johnny Edwards and Tim Rausch at (706) 724-0851.


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