Hotel delay costs Jekyll millions in lost business
The Brunswick News
By MEGHAN PITTMAN
September 28, 2012
The Jekyll Island Authority says it cannot wait for Georgia to implement a state tourism tax break a developer says it needs to get construction started on a convention hotel.
After seven conventions, valued at $3.8 million, cancelled plans to meet on the island in 2014 because of a shortage of accommodations, authority members said they will work with the developer of a 200-room Westin hotel to do what they can to help break ground as soon as possible. "We're in dialogue with the developer to come up with a way to get them here," said Eric Garvey, chief communications officer for the authority that operates the state park.
"We see this as only a slight delay." Originally, the Westin was expected to be open by mid-2014, and conventions had been booked on that schedule.
Now, there is no date to start or finish construction. Among the conventions backing out are the Georgia Forestry Association, which will take its 350 attendees to Hilton Head, S.C., and the Association County Commissioners of Georgia, which would have brought 1,200 people to the island.
With construction yet to begin on a planned Hyatt Place hotel and the developer of the Westin looking for financing, some conventions booked for early 2014 that were counting on those hotels for rooms cannot be guaranteed they will be in operation, Jones Hooks, authority executive director, said. "We've alerted all of the groups that are part of our cache because we want to be straightforward, but we strongly believe that the hotels will be moving forward very soon," Hooks said.
Other conventions among the 46 that had tentatively booked for 2014 have pushed back their meeting dates and will revisit the island when the hotels are built.
Garvey says the absence of the tax break, which Westin developer Jekyll Landmark Associates needed to secure a loan from PNC Bank for $25 million toward the $39 million construction cost, has forced the authority to look for alternatives.
A recently approved Jekyll Island Tourism Development Fund the Jekyll Island Authority created could be a part of the solution, Garvey said, but it isn't the answer.
Those funds won't be dispersed until 2015, about the same time the stalled state tourism tax break could be implemented.
"The problem is timing," Garvey said. "Without a clear timeline, we've chosen to solve the problem ourselves.
There's lots of number crunching."
The problem arises because the Georgia Tourism Development Act that Gov. Nathan Deal signed into law in May 2011 has yet to be implemented.
The law was designed to encourage development of museums, water parks, convention hotels and other tourist attractions by allowing those businesses to keep a portion of sales taxes they collect for up to 10 years.
The law has not been implemented because state officials say writing administrative regulations to accompany it has been so difficult that legislators may need to amend the law next year.
Jekyll Landmark Associates had estimated the law would allow it to retain $8.5 million in sales taxes over 10 years. Without being able to show that money on its books, it has been unable to secure financing.
But Jekyll Island officials say with the island's new 128,000-square-foot convention center that opened in May at stake - a $50 million investment touted as the centerpiece of Jekyll Island revitalization - they cannot afford to wait. "Really, it's been a long and slow decline in tourism here. It's no mystery," Garvey said. "But we're already seeing it turn with our new park and new convention center. We just can't do it without a new hotel."
With only Great Dunes Park and the convention center completed in the island's planned Beach Village of shops and restaurant, it is difficult to attract conventions.
Without a full-service hotel adjacent to the convention center and retail space next to it, some convention planners say the convention center alone won't work for them.
"Our plan includes the hotel and shopping and dining. We are experiencing some attrition of booking," Garvey said. "We knew and the meeting planner knew (about the tentative reservations). We are well aware that with a new hotel we are better off."
Groups that have traditionally held conventions on the island, such as the Association County Commissioners of Georgia, need accommodations for hundreds of guests.
They go to Jekyll Island because it has the state's only oceanfront convention center, Garvey said. But for the Georgia Forestry Association, no hotel means a relocation out of state. "We will not go to Jekyll Island without a new convention hotel," said Steve McWilliams, association president. "It just won't happen."
- Associated Press reporter Russ Bynum contributed