Jekyll hotel outlook mixed
The Brunswick News

A company that had hoped to operate a planned Hyatt Place hotel on Jekyll Island has failed to secure financing for its part in a sweeping revitalization plan for the island state park.

Spherical Energy and Environmental Systems had assumed operational responsibilities for developer Phelps Development after the Chhatrala Group of San Diego backed out of a commitment to operate the proposed 120-room oceanfront hotel.

Now, Phelps managers are looking for an operator to replace Spherical Energy.

"They just have not been able to get across the finish line and, therefore, we think it's time to move in a different direction," Jones Hooks, executive director of the Jekyll Island Authority that oversees the state park, said of Spherical Energy.

At a meeting Monday of the authority board, Hooks said the authority has been in talks with corporate officials at Hyatt to determine the best operator. He said he is confident the project is still moving forward.

Even though the developer of a planned 200-room Westin hotel was unable to sign a construction contract in time for a groundbreaking ceremony Monday, Hooks said that project is also moving forward.

"At this point, we have continued to see an increase in requests for copies of different documents and various other requests from (PNC Bank) and the Westin group, so we are very comfortable that they are moving toward their closing," Hooks said.

Westin managers have said they are committed to opening the hotel near the Jekyll Island Convention Center by August 2014.

Both the Westin and Hyatt Place hotels are crucial to having enough rooms to book large events at the convention center, which opened this past May.

In addition to those hotels, the Jekyll Island Authority is counting on a revival of another site to burnish the island's image.

The Jekyll Island Oceanfront Clarion Hotel, 975 North Beachview Drive, was closed in January 2011 and is now owned by Center State Bank of Jacksonville.

Bank officials told the authority board last May they were optimistic the property would be sold within a month, but the bank's most promising prospect was unable to provide adequate financial information to complete a sale.

Chris O'Donnell, the authority's legal associate, said the board may have to consider enforcing the foreclosure provision of the hotel's lease for the state land it occupies.

"(Center State Bank has) assumed the lease. They are assuming to have the responsibility to have an ongoing hotel there, and if they do not follow through on having an ongoing hotel there, that one thing that we can use ... (is) to find them in default of their lease and take the lease back."

All land on Jekyll Island is owned by the state, and businesses and homeowners that own structures on it merely hold long-term leases to the land.

Hooks told the board that authority managers anticipated meeting the Center State Bank officials, and he hoped to have an update at the next board meeting, May 20.

* Reporter Nikki Wiley writes about government, business and other local topics. Contact her at nwiley@thebrunswick, on Facebook or at 265-8320, ext. 321.