Updated: Sat, 03/09/2013 - 15:40

Chatham County Commission postpones hotel vote

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After an hour-long discussion Friday, Chatham County commissioners voted 5 to 4 to postpone consideration of a development agreement for a proposed convention hotel on Hutchinson Island.

Commissioner Tony Center requested the agreement be put up for a vote on March 22 instead to allow some of its terminology to be clarified.

Center said he wanted the wording to better reflect that the agreement is non-binding and Chatham will face no financial liability if the commission decides not to move forward with the controversial project.

The decision to hold off on approving the contract came after residents were invited by Chairman Al Scott to comment on the proposal. Most of those who spoke out against the project said they were not against a hotel being built on the island but were opposed to the idea of the county providing financial assistance.

“They should pay for it themselves,” said Lis Overton, president of the Savannah Area Republican Women.

Supporters argued that the project could not be completed without public backing and urged commissioners to approve what they saw as an economic boost for the county.

The development agreement is meant to give the developer up to a year to secure financing for the hotel, which would include up to $50 million in county backed bonds for the hotel’s conference center and parking garage. The hotel owner would provide an estimated $75 million for the remaining cost.

A recently completed peer review concurred with a previous economic study’s projections that the 500-room hotel, with 400 to be committed for conventions, would double convention business, create 1,170 new jobs and add $83 million in spending.

A report by The Lindgren Group that was based on interviews with representatives from the Savannah hospitality community concluded there was no justification for a public bond-financed hotel in Savannah.

The agreement will allow county staff to continue its due diligence and confirm safeguards are in place to minimize any public risk, said Assistant County Manager Michael Kaigler. Before entering a binding contract and issuing the bonds, 13 tasks will have to be completed, including concurrence that the county’s bond rating would not be downgraded, Kaigler said.

To pay the annual debt service on the bonds, the county would rely on lease payments from the owner for the public space.

Kaigler said the county’s annual liability would be about $2.6 million in the first several years, if the hotel went “belly up.”

Commissioners Lori Brady, Patrick Farrell, Dean Kicklighter and Helen Stone, who opposed the project, voted against postponing consideration of the agreement.

Brady said she was concerned about the impact on the hotel community and the risk to taxpayers. Noting the plan dates back to 2008 — when the Georgia International and Maritime Trade Center Authority took steps towards its development — Brady said there are too many incomplete tasks and unanswered questions.

“Everything should have been resolved by now,” she said.

In other news, commissioners voted 6 to 3 to approve a settlement agreement with Savannah for how an estimated $630 million in local option sales tax revenue should be distributed.

Under the agreement, the county’s share would increase from about 18 percent to 23 percent, although it would no longer receive reimbursement for housing city inmates at the jail. Savannah’s share would be reduced from 67 percent to 58 percent, while the remaining would be split up among the seven smaller municipalities.

Brady, Farrell and Stone voted against the settlement, stating that the county was not getting its fair share.

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