By Marvin G. Cortner
Editor

The Osceola County Commission Monday unanimously approved a three-year extension to a $120-million, 30-year agreement with Rida Associates and Gaylord Hotels to use tourist development taxes to expand convention and hotel space and to build eight amateur ball fields.

Besides the extension, which allows the companies more time to line up private funding, commissioners also approved a few changes to the agreement, all at the Rida Associates-owned ChampionsGate and the Omni Hotel, which are located off Interstate 4 in Davenport. Changes include the new playing fields as well as phased construction for the privately funded new hotel rooms and publicly funded conference space. The new plan also calls for 10,000 fewer square feet of conference space but 150 more hotel rooms.

Extended until Feb. 1, 2014, the agreement pledges $40 million in financing to build the conference center (55,000 square feet of space in phase 1, and then 110,000 square feet in phase 2), with $8 million of that amount allocated for marketing of the new hotel rooms and the new ball fields, which would be built in the first phase and which must be started within two years. Because the ball fields would be in Polk County, related capital costs would not be eligible for tourist tax funding.

For the conference center, the county would provide $6.67 million in cash for phase 1 work as well as $11.83 million in proceeds from bonds. Phase 2 work would require $13.5 million in financing from bonds. Phase 1 work would include 150 new “limited service” hotel rooms at the resort and 500 new “high-quality” rooms in the second phase.

The conference center site would be owned by Houston-based Rida Associates but leased to the county at no cost, with the lease expiring when the bonds are paid off using tourist tax revenue.

County Commissioner John Quiñones said he was comfortable with a timetable for construction provided by Rida Associates but not with the Nashville, Tenn.-based Gaylord Hotels, which owns the Gaylord Palms Resort and Convention Center on Osceola Parkway (where this project partner’s improvements would be made). Quiñones’ worry was that construction would continue to be delayed if the economy doesn’t improve enough; a situation that prompted the request for the extension a year ago. He also said that without assurances that construction would start, he was reluctant to tie up tourist tax revenue for another three years.

Johann Krieger, senior vice president and general manager at the Gaylord Palms, said the resort is committed to starting the project.

“Our commitment in 2008 is our commitment today; we will move forward in six to nine months,” Krieger said. “It makes sense for us and for the county to move forward as soon as possible; the quicker we get plans, the quicker we can do the marketing.”

Krieger said the resort would also be renovating all of its hotel rooms in order to keep up with the competition in Orange County.

Ira Mitzner, representing Rida Associates, said it is business-wise in terms of cost and feasibility to “build in a recession and open in the recovery.”

“We look forward to getting folks in Osceola County back to work,” Mitzner said, praising the county’s use of tourist tax money in this public-private partnership to promote economic development.

The $80 million in financing for Gaylord Palms will help pay for 594 new hotel rooms and a 350,000-square-foot expansion to the convention center at that resort, which is located off Osceola Parkway.

A study by Real Estate Research Consultants predicted a direct impact of 1,000 new jobs and a $34 million annual payroll produced by the projects. Construction alone would draw 3,100 jobs and a $116 million payroll over the 36-month construction period, the study stated.

County Manager Don Fisher said that the county, for its $120 million, would get a return on investment of $320 million in tourist tax revenue over the 30 years.

“This is a great opportunity for the three partners – Osceola County, ChampionsGate and Gaylord – to re-engage our developments and conference center initiatives in an effort to let us stay competitive in the marketplace,” Rida Development Senior Vice President Marc Reicher said. “This will now allow us to get a jump-start and do some real planning in moving toward economic recovery.”

It is estimated that the total investment at the various projects at the two resorts would be close to $500 million. Construction of the conference center and the athletic fields at ChampionsGate should begin within the next 14 months.

Harmony project

The commission Monday also gave final approval to a sale-leaseback agreement with Connecticut-based Birchwood Acres that provides $7.5 million in tourist tax funding as seed money for an eight-field amateur sports complex on an 81-acre site in Harmony.

According to county documents, the cost of this project would be about $21.7 million – $17.7 million for the sports facility and $4 million for an access road coming off U.S. Highway 192. The deal includes Birchwood Acres donating the property to the county and the county becoming the owner of the sports complex at the end of a 30-year lease period.

As part of the agreement, Birchwood Acres, which is the developer of Harmony, would maintain the facility at no cost to the county and would guarantee 38,888 room nights the first year, 47,222 the second year and at least 55,555 room nights each year thereafter. Failure to meet the room night guarantee would result in a reduced lease term.

“We are putting real cash in this; we are obligated to make this successful,” Jim Lentz, a manager of Harmony Development, said.

The county for the next five years also would have first shot at purchasing an additional 25 acres at the sports complex for four additional sports fields.

The commission gave tentative approval to the project last year, with final details to be worked out in negotiations. Construction of these sports fields will begin within 12 months and is scheduled to be complete by mid-December 2013, county officials said.