Developer: Stalled event center puts new hotel in jeopardy

A downtown property owner and a hotel developer are pushing the Augusta Commission to find a solution that will get a stalemated trade center project moving again.

 

Land contracts for a new Hyatt hotel on Reynolds Street across from the proposed TEE Center will expire on Aug. 31. And one of the four property owners said he won’t extend past that date, putting the $25 million, 135-room hotel project in jeopardy.

Courtland Dusseau, managing partner for Alabama-based Legacy Hospitality, said he cannot get his Hyatt hotel financed unless the TEE Center is constructed.

A public information campaign was launched by one of the land owners, Julian Osbon, who said the hotel has an economic impact of $215 million over 25 years. He too has contacted commissioners.

“I don’t think all the people understand the consequences. I wanted to make sure that if we did lose the hotel, that everyone had an opportunity to consider the possibilities,” Mr. Osbon said. He owns the building along the west side of the Augusta Common where the hotel would be constructed.

The commission has been at an impasse since early May over the TEE center and the Laney-Walker and Bethlehem neighborhoods revitalization project, both of which are to be funded through a $1-a-night hotel fee implemented last year. The TEE center was approved by voters for $20 million in the 2005 special-purpose sales tax referendum, but it took almost two years for the commission to approve a site and operating agreement, which happened only after Commissioner Don Grantham garnered a sixth vote from Betty Beard through the inner-city revitalization deal.

Now the TEE center's cost is estimated at $38 million, not including a parking deck estimated to cost $12 million to $17 million.

City Administrator Fred Russell’s initial funding proposal, which involved a combination of bonds and rerouted revenue streams, failed May 5 by a 5-4-1 vote, with the split falling along racial lines. Tensions escalated in the ensuing weeks, with one special-called meeting canceled for lack of attendance, another boycotted by half of the commission and the black commissioners calling a news conference to say they won't "succumb to fear, threats or intimidation."

Since then, the commission has voted to allow Mr. Russell to take only small steps forward, such as hiring bond attorneys, having the TEE center's architects analyze parking, having the TEE architects draw schematic designs, producing a detailed accounting of the $38 million construction costs, developing a timeline for funding the Laney-Walker and Bethlehem projects and finalize the operating contract with Augusta Riverfront LLC.

Mr. Russell said today that to move the TEE center and Laney-Walker/Bethlehem projects forward full bore, he needs votes to approve bonding, approval of the operating contract, approval of a $1 million loan to keep the inner city projects going forward in the short run and permission to purchase property.

Mr. Dusseau was on the phone with commissioners today in an effort to get the TEE Center project moving again.

“The TEE Center has become an issue. I’m just trying to do something that will help the whole community, no matter what district it’s in,” Mr. Dusseau said. “To me this is not a political deal, it is an economic deal.”

Land contracts for the hotel were signed in January 2008 and have already been extended twice.

Mr. Osbon said he’s not interested in a third extension without movement on the trade center.

“The controversy with the commission doesn’t look real promising. I’ve indicated that I’m not going to give another extension. I don’t know about the other property owners,” he said. “People might say that I’m self-serving and want to sell some property. I do have a contract on the property and would like to see it close. Although, Sept. 1, I will probably put the property on the market for twice the price I’ve quoted (Dusseau).”

Mr. Dusseau said Legacy Hospitality picked Augusta because of the big events, such as the Masters Tournament and Futurity, but also because of the TEE Center’s potential convention traffic.

Mr. Osbon is not optimistic that the commissioners will be able to resolve their conflict by the Aug. 31 deadline.

“At some point, they may build a TEE Center, but they will have lost the hotel,” Mr. Obson said.

Mr. Osbon's letter was distributed to chambers of commerce, the Downtown Development Authority and Augusta Tommorrow.

"My phone started rining as soon as Julian's letter went out," said Margaret Woodard, executive director of the Downtown Development Authority.

READ MORE:

Mr. Osbon's letter to commissioners

Community alert memo released by Mr. Osbon

Topics:
 

More

Savannah River Site resumes normal activity

A suspicious item was discovered Wednesday afternoon at the Savannah River National Laboratory which prompted emergency responseactivities.

... Read more