Jekyll deal victim of economy

The Brunswick News

By ERIKA CAPEK
12/9/2009

The Jekyll Island Authority is promising to complete its planned beachfront redevelopment largely on schedule after it parted ways with its private developer Tuesday over how quickly work can begin in a sour economy.

The authority and Linger Longer Communities said in separate prepared statements that they have mutually terminated negotiations on a final agreement for the $100 million project.

The authority said it will now seek multiple developers to build various pieces of the complex of two hotels, retail space and a new or renovated convention center that Linger Longer had planned to deliver as a package.

The authority said all but one part of the projects - vacation condominiums - will be completed by the end of 2012. No work has been started.

The breakup of the Jekyll Island Authority and Linger Longer marriage will not affect Great Dunes Park, the 20-acre site north of the convention center that the authority broke ground on Monday.

The authority said the decision to suspend the contract with Linger Longer was mutual. More than likely, it's a decision that will become permanent when the authority board meets Monday, officials said.

Eric Garvey, chief communications officer for the Jekyll Island Authority that operates the state-owned island, said Linger Longer was unable to guarantee completion by early 2012 of a new convention center and Beach Village project of shopping and an economy-class hotel and a mid-scale hotel.

Linger Longer Communities blamed the economic recession for its inability to meet the 2012 completion date.

"Our decision to release the authority from its commitment to us was due to the uncertainty of the economic environment and the difficulty that this uncertainty imposes on a workable development schedule," Mercer Reynolds, chairman of Linger Longer's parent, The Reynolds Cos., said in a prepared statement.

In the face of a starting date to begin construction in January, Atlanta-based Linger Longer had sought a contract change to give it a two-year delay in beginning construction.

Jekyll Island officials were unwilling to grant it, and said they would follow the blueprint for developing facilities that Linger Longer had laid out after it was selected in 2007 to give a makeover to a prime portion of the island.

The island's aging motels and outdated meeting halls have been blamed for tourism falling from a peak of 2.1 million visitors a decade ago to 1.49 million last year.

Garvey, who last week said the authority and Linger Longer were making headway on a final contract, said Tuesday the authority was unwilling to budge on the timetable for completion.

"We needed to have a firm time line that would bring together that opening by 2012," Garvey said. "Because of the uncertainty that exists out there, they were unable to agree to that."

The authority remains optimistic and said it is committed to finishing all the projects on time, with the exception of the vacation-ownership project, which was already planned to be completed at a later date.

The authority said it will contract out each project individually.

"By breaking up the pieces, it gives us more sustainability to find a partner," Garvey said. "We have not made contact with developers yet, but we are confident that we will be moving forward with the project."

The $50 million in public bonds that have already been secured for the revitalization have been set aside to fund the state-owned portion of the project. The authority is also expecting at least $120 million in private-sector investment funds.

"We will have retail operations in temporary facilities starting in the third quarter (July-September) and we must show a definite time line," Jones Hooks, executive director of the Jekyll Island Authority, said in a prepared statement.

"We also must bring new hotel lodging units on line as soon as the new convention center is ready. These and other circumstances have dictated this decision."

Hooks said the economy has created much uncertainty.

"In my 30 plus years in community and economic development I have not seen things so bad," he said.

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Article Insert:

Candidates for governor applaud severance of partnership

Two gubernatorial candidates cheered the announcement Tuesday that Linger Longer Communities and the Jekyll Island Authority have suspended their partnership in the proposed revitalization of the island’s waterfront.

David Poythress, a Democrat who has announced intentions to run for governor in 2010, called the suspended partnership a “great victory for all Georgians who saw that this backroom deal was not good for Jekyll Island or the citizens of Georgia.”

Eric Garvey, spokesman for the Jekyll Island Authority , said the revitalization of Jekyll Island should not be apolitical issue.

“I understand Mr. Poythress wanting to make it one and if he wants to claim victory, so be it,” Garvey said, “But his position was unfounded. There was no “backroom deal” the decision to suspend negotiations was based more on timing and economic conditions, ah his public statements had nothing to do with it.”

Sen. Jeff Chapman, R-Brunswick, a Republican candidate for governor in 2010, has opposed the partnership agreement between the Jekyll Island Authority and Linger Longer from the get-go and was glad to hear it has been suspended.

Chapman hs contended all along that the state could have gotten a better deal.

He said Tuesday that the suspension was an example of everyday people working together and influencing the government to make the right choice.

“This deal never did make economic sense from the beginning,” he said. “I’m glad that the JIA realized that it was flawed and did what was in the best interest of the people.”

The also said he concurs with the proposed idea to break up the partnership among individual opportunities for developers.

“I don’t know what took so long for them to catch up, but the end result was the good part,” Chapman said.

Erika Capek
The Brunswick News