|By Nikki Wiley, The Brunswick News,
Ga.McClatchy-Tribune Regional News
May 23, 2012--An officer of the bank managing the foreclosed Jekyll Island Oceanfront Clarion Hotel is optimistic that the property will be sold within the next month.
But Jekyll Island Authority officials want assurances that new owner of the hotel at 975 North Beachview Drive will match the island's revitalization vision.
The board of the Jekyll Island Authority received an update on the hotel that was closed in January 2011 by Center State Bank of Jacksonville, which now manages the vacant property.
Following a decrease in room revenue and bookings, the hotel was abruptly closed, resulting in fewer rooms available on the island. The Jekyll Island Authority is attempting to increase room availability by building three new hotels to accommodate business brought in by the newly opened convention center.
The 15-acre property at the waterfront on the north end of the state park was once the second busiest on the island, But the site experienced a decline in revenue when the resort was remodeled in spring 2008, converting units to condominiums to be sold, said Eric Garvey, chief communications officer for the Jekyll Island Authority, which operates the island park.
The volatile real estate market and crumbling economy caused the property to shut its doors for good last year.
"It once operated 263 lodging units and was the largest hotel on the island," Garvey said. "In 2008, it generated $4.3 million in lodging revenue, which was second only to the Jekyll Island Club Hotel."
That was 17 percent of the total island lodging revenue. "This was in 2008, prior to their condominium conversion project, so you can see how important the property is to Jekyll Island," Garvey said.
In 2010, Jekyll Oceanfront Clarion Resort had the lowest occupancy of the hotels on the island, at 34.6 percent.
Jekyll Island Authority Board Chairman Bob Krueger emphasized that whoever takes over the property needs to match the vision for the island. With several revitalization projects completed, like Great Dunes Park and the new convention center, the island is on its way to making its revitalization plan a reality. The rehabilitation of the resort should fit that vision, Krueger said.
In addition to the planned Hyatt Place hotel, Westin hotel and 39 rooms at the beachfront that will serve as an extension of the Jekyll Island Club Hotel, the island's Hampton Inn and Suites was built on the site of a former Holiday Inn and opened in 2010.
Ideally, Krueger said he would like to see the Oceanfront Clarion Hotel demolished and rebuilt as a new property.
"I hope whoever you're in discussions with understands what our expectations are," Krueger told the bank representative.
Garvey said the bank is in violation of its lease as long as the property remains vacant. "They're technically not in compliance, because their lease requires them to be operating a hotel and it's not operating," Garvey said. "They're aware of that. They just need to move forward and to get the property sold."
He said the authority is concerned about the sale of the property and its ultimate operator.
"It would be great if they could sell that property in 60 days," he said. "If it doesn't, the board may have to address that situation."
Matthew Maynor, vice president and special assets manager for Center State Bank, said he expects the hotel will be under contract within 60 days.
Maynor told the Jekyll Island Authority board that he understands the loss of revenue that is being incurred in the resort's closing. "We understand the goal is to get these rooms up and rehabbed and online again," he said.
The property has been shown to 40 potential clients and three have had expressed interest, Maynor said.
The property was sold at an online auction in 2011, but the sale never materialized and it was ultimately foreclosed on. Currently, the resort is listed for $6.9 million and is being conducted as a Federal Deposit Insurance Corp. assisted sale.
After the FDIC appraisal, Maynor said he expects the price to drop to about $6 million. An appraisal in June of last year valued the property at $11.6 million.
Three Georgia State Patrol officers now live on the premises to provide added security.
"It has cost us over $1 million in what we've paid to the authority," Maynor said.
(c)2012 The Brunswick News (Brunswick, Ga.)
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