NEWS - Hospitality & Tourism

By Lou Phelps, SBJ Staff

Dec 19, 2011 - A contingent of Savannah business leaders met with the Chatham County Commissioners Friday morning to provide an update on the negotiations and financial analysis to build a new hotel on Hutchinson Island, slated to be a public/private partnership.

The Commissioners were being asked to grant another extension to an agreement with a hotel development company, Journeyman Austin Holdings, that is the chosen developer. In attendance in support of the project were David Paddison, Eric Johnston and Art Dana, and others.

Supporters contend that more hotel rooms adjacent to the convention are necessary to improve the sales success of the Savannah International Maritime Trade and Convention Center. They want to see a project developed using public and private funds, a concept that has been used by a number of cities to fund major tourism and economic development initiatives.

But detractors do not want public funds committed to guarantee bonds that would be issued for the local, county and state’s portion of the project. They argue that if the project fails, and there is a default on the bonds by the consortium of owners, public funds will be used to pay off the bonds.

And, they don't think public money or obligations should be used to develop a business that will compete with existing hotels.  Additionally, they argue that if there is a viable business model for a new hotel on Hutchinson Island, then private hotel development companies would be stepping up to invest.

The discussion was dominated by Commissioner Helen Stone who argued against another extension to the ‘Memo of Understanding’ (MOU) with the developer – this time for 120 more days.  

Stone contended that the Commissioners voted on August 12, 2011 for a 90-day extension to the MOU that was set to expire on Sept. 13, 2011. “The 90 days have passed,” said Stone. “Why are we being asked to extend something that has expired?”  She argued that the project should be put back out to bid.

Attorney Russ Ross, in the audience, and also speaking against the extension, insisted on being heard as part of a public comment period. Commissioner Harris Odell attempted to 'call the question' and not allow public comment, but after the audience reacted negatively, Chairman Pete Liakskis allowed Ross to speak.

Ross represents hotels in the Savannah historic district that oppose building the hotel with government support, and agreed with Stone that the MOU had expired.

County Attorney Jon Hart said that the last extension did not get signed until Sept. 22 because Chairman Pete Liakakis had wanted some changes made to the document, and therefore the Sept. 22 date started the clock on the 90 days...not the Sept. 13 date.

But Ross said “You can’t have it both ways,” arguing that either the MOU expired on Sept. 13,  by the failure to not sign it until Sept. 22, or the Sept. 13 date was valid.

The vote barely passed – 5 to 4 – with Pat Farrell, David Gellatly and Dean Kicklighter voting ‘No’ in support of Stone’s position.

This second extension is needed to allow the County’s staff more time to analyze the financial presentations of the developer. And, the county and developer are awaiting a decision by Governor Deal and State officials on whether the public/private hotel will qualify for a tourism project sales tax refund that improves the financial picture of the project.

Both Odell and Dr. Priscilla Thomas made statements in support of the hotel project.