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Jekyll Island reportedly losing groups over hotel delay

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POSTED: October 3, 2012 10:36 a.m.
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Jekyll Island, a long-time tourist attraction, recently has been losing business over a reported hotel-construction delay.

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SAVANNAH — A tax break to promote new Georgia tourist attractions remains unavailable to businesses more than 16 months after the governor signed it into law, and the prolonged wait already has caused Jekyll Island to lose convention business after taxpayers spent $50 million to lure groups back to the island state park.

In May 2011, Gov. Nathan Deal signed the Georgia Tourism Development Act, which encourages development of museums, water parks, convention hotels and other tourist magnets by allowing those businesses to keep a portion of the sales taxes they collect for up to 10 years. State officials said the law is so complex and writing the necessary regulations has been so tricky that lawmakers may need to amend the tax break next year before it can be implemented.

Developers of a new 200-room Westin hotel on Jekyll Island were counting on that tax break to secure a loan that would have allowed them to break ground this month. Jekyll Island officials, who just opened a new convention center in March, have dozens of groups lined up to check into the finished hotel starting in mid-2014.

But now construction is in limbo. The state still isn’t offering the tourism tax incentive that Jekyll Island officials say the developer needs to get its $25 million bank loan. Meanwhile, uncertainty over when the convention hotel will get built has caused a handful of groups to back out of plans to meet at Jekyll Island. Officials say the lost business is worth about $3.8 million.

“Because of what’s happening with the hotel, we definitely will not be there in 2014,” said Beth Brown, spokeswoman for the Association County Commissioners of Georgia, which holds a conference for 1,200 people every spring.

A long delay for the Westin could deliver a huge setback to state-owned Jekyll Island’s comeback from years of slumping tourism and convention business. Georgia taxpayers invested $50 million in a new 128,000-square-foot convention center and beachside park as the centerpiece of a tourism makeover.

When Deal attended a ribbon-cutting at the convention hall in March, more than 200 groups had booked meetings there through 2016. But much work remains unfinished. And the Jekyll Island Authority, which manages the island, plans to build new retail space in the beachfront area.

“Our convention center is not sustainable sitting there all by itself,” said Eric Garvey, Jekyll Island’s marketing director. “We need the hotel and the retail to be built to make it work.”

Garvey said 46 convention groups tentatively booked 2014 meetings on Jekyll Island on the condition that the Westin would be ready. Of those, he said, seven groups backed out and plan to go elsewhere because of the hotel delay.

The Westin’s developer, Jekyll Landmark Associates, did not comment. Garvey said the developer had a commitment letter from PNC Bank to loan it $25 million of the hotel’s estimated $39 million construction cost.

However, Garvey said, the developer planned to secure that loan using the tourism tax break. Jekyll Landmark Associates expected tax refunds to save it $8.5 million over a decade. That money would help it repay the loan.

Meanwhile, the delay means a loss of convention dollars not only for Jekyll Island, but for all of Georgia.

The Georgia Forestry Association was interested in booking Jekyll Island for its 2014 conference of about 350 people. But with no guarantee the convention hotel will be open, the group instead decided to go to Hilton Head Island.

“We will not go to Jekyll Island without a new convention hotel,” said Steve McWilliams, the association’s president. “It just won’t happen.”

 

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