|By Nikki Wiley, The Brunswick News,
Ga.McClatchy-Tribune Regional News
Aug. 21, 2012--A delay in implementing a state tax credit program has put construction of a Westin hotel on Jekyll Island on hold.
The $25 million project will be delayed while the Landmark Group looks for another way to finance a portion of construction costs on its project, the board of the Jekyll Island Authority was told at its meeting Monday.
Jones Hooks, executive director of the Jekyll Island Authority, told the authority that a tax incentive program the developer was counting on is unlikely to be offered by the state.
The Georgia Tourism Development Act allows for eligible projects to keep a portion of sales tax revenue generated by the property.
Being designated as an approved project for the tax incentive was a condition of the loan backed by PNC Bank. Other conditions included the assurance of the completion of the Beach Village retail center before the completion of the hotel and a 50 percent debt guarantee by the U.S. Department of Agriculture, which has already agreed to back the loan.
While the Landmark Group continues in discussions with Westin corporate officials and is current on all leasing payments to the authority, it must find another way to back part of its $25 million loan.
Eric Garvey, chief communications officer for the authority, said the tourism industry pushed for the tax incentive program, vetoed initially by Gov. Sonny Perdue but later signed into law by his successor, Gov. Nathan Deal.
No rules have been written addressing how to designate tourism projects for the tax credit, leaving the state unable to administer the program.
"(PNC Bank) basically won't close on the loan because the rules aren't established," Garvey said.
The developers can look for an alternative program to provide funding or continue to depend on the state to provide the tax incentive. "The other option, that we don't like at all, is to just wait," Garvey said.
Garvey said the authority and the project's developer will continue to look for funding sources. "There's still ongoing dialogue about how to make it work," Garvey said. "We just have to react to it and work as hard as we can."
The Westin hotel is part of Jekyll Island's ongoing revitalization plan that includes construction of three new hotels, including a Hyatt Place and 39 beachfront cottages, the recently renovated Great Dunes Park and the newly constructed Jekyll Island Convention Center.
(c)2012 The Brunswick News (Brunswick, Ga.)
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