The developers are FaulknerUSA of Austin, TX; Starwood Hotels and Resorts Worldwide of White Plains; and Gaylord Entertainment Co. of Nashville. The convention center would be about 20 miles south of Downtown Orlando.

"This will be a drop-dead vote," Osceola commissioner Atlee Mercer tells GlobeSt.com. "This is the decisive moment. It's either up or down."

The most creative of the three financing proposals for the project comes from Gaylord Entertainment which owns the $500-million, 1,406-room, three-year-old Gaylord Palms & Convention Center, almost in Disney's back yard. The $188-million joint venture project being proposed by Gaylord would cost the county $103 million. By doing the deal, the county would have access to an estimated 550,000-sf exhibition and ballroom facility at the Gaylord resort.

If accepted by the commissioners, the Gaylord plan would replace an estimated $400-million, traditional-designed, 250,000-sf convention center project the county has been mulling for the last decade. The county plan and its various revisions haven't gone forward because elected officials and private developers haven't figured out how to pay for the enterprise, as GlobeSt.com reported in several previous editions.

The Gaylord plan, however, would have the county pay for a portion of the hotel's exhibition space expansion in exchange for the county also using the space for its own bookings, commissioners have been told at previous public meetings. Gaylord's share of the expansion would be $85 million.

The expansion would grow the total existing 400,000-sf exhibition space at the hotel to about 550,000 sf and would include additional meeting rooms and a 100,000-sf ballroom that would be one of the largest in the Southeast, according to Gaylord officials. The hotel's existing 1,406 room inventory would climb by another 400 rooms to a total 1,806 rooms, large enough to compete with any of Disney's 22 hotels, area consultants and brokers tell GlobeSt.com.

In the background of the Gaylord proposal is another convention center plan--a two-year-old proposal from FaulknerUSA on a project that would be located at State Road 535 and Osceola Parkway, a key tourist corridor intersection facing Disney. In 2003, Faulkner voluntarily forfeited a $1-million performance deposit check when the developer couldn't meet a financing plan deadline set by the county. Now, however, Faulkner officials tell GlobeSt.com they are confident they have all the numbers needed to do the project.

"We are hopeful that the Osceola commissioners will hold true to their original dream of creating a county-owned convention center and headquarters hotel that will become the economic driver studies showed they needed years ago," says FaulknerUSA president Mark F. Schultz.

He tells GlobeSt.com his company has "put together a financially strong proposal that meets all of the country's requirements and has gotten the nod of the New York credit markets." Schultz adds, "In addition to it being the strongest deal of its kind ever done, this project will be the largest convention center and hotel package bond financing ever done."

Supporting FaulknerUSA's financing package is Starwood Hotels and Resorts Worldwide. The hotel operator "has come to the table with a $20-million letter of credit to back the hotel and we have also added community enhancements, such as funding a school program," Schultz tells GlobeSt.com. As FaulknerUSA's partner, Starwood would operate the estimated 200-room hotel adjacent to the convention center.

Still, real estate and hospitality industry sources in a position to know tell GlobeSt.com the Gaylord plan is likely to succeed because a changing national convention center construction trend shows fewer large public-owned facilities are being built because of their unprofitability and high financing costs.

Another factor, according to industry sources, is that large hotels with 1,000 rooms or more are quickly increasing their convention center space and taking dominant market share away from the existing local convention centers.

After being told of that potential scenario, a FaulknerUSA representative tells GlobeSt.com, "Your sources are wrong. …Rumors, confusion and misinformation are abundant regarding this project and sadly, the local press has been way less than accurate in their coverage."

However, adding fuel to the Gaylord proposal are the number of large hotels in major markets now increasing their exhibition and meeting space. For example, Washington, DC-based Host Marriott is investing $60 million into its largest hotel property, the 28-story, 2,003-room Orlando World Center Marriott Resort & Convention Center which will have a total 400,000 sf of meeting space when the newest renovation program is completed in 2007, as GlobeSt.com previously reported.

Based on GlobeSt.com research, area resorts offering sizable meeting and convention space, after Gaylord Palms and World Marriott, are Walt Disney World's Swan and Dolphin Hotels with a combined 329,000 sf; Disney's Coronado Springs Resort, 220,000 sf; Renaissance Orlando Resort, 185,000 sf; Caribe Royale Resort, 150,000 sf; Wyndham Orlando Resort, 119,000 sf; Rosen Centre, 106,000 sf; and Grande Lakes Orlando, 85,000 sf. Rosen Shingle Creek Resort expects to offer 250,000 sf of meeting space when it opens in south Orlando in 2006.

Instant Insights /

GlobeSt.com UPDATE: Convention Center Proposal Is Down to Crucial Vote

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