Osceola Strikes Funding Deal With Austin Developer

The point man in the plan is Mark F. Schultz, CEO of Faulkner USA, the Texas developer who must document his end of the financing to county commissioners by Sept. 1 or lose a $1 million good-faith check.

Then, if a ceremonial ground-breaking isn't staged by Oct. 15 to guarantee a March 2006 convention center opening, Faulkner USA will be terminated and the county will start new negotiations with two other developers, or discard the project entirely as unworkable.

That has happened before. Palm Beach, FL developer Robert Miller couldn't find moneymen to fund his planned $1.1 billion World Expo Center when that venture was quietly buried in 2001.

Then the county terminated Orlando-based Xentury City Development Co. after union officials alleged the company's parent in Saudi Arabia had ties to global terrorist Osama bin Lauden. Xentury denied the charges and the union couldn't provide definite proof.

Under the financing plan, Osceola officials are setting a nonprofit corporation that will issue tax-free bonds to pay for the entire cost of the center. Osceola taxpayers themselves will be responsible for only the $98.5 million hard construction cost of the center.

The nonprofit corporation would own the buildings and land at the convention center site at Osceola Parkway and State Road 535 which is at the Orange County boundary. The corporation would then deed the center and the 80 acres back to the county, and would operate the center under a 50-year lease.

Osceola would guarantee the corporation's bonds by paying annual debt service of about $7.3 million for 50 years, or a total $365 million. After 50 years, the county would own the land and the buildings as the original mortgage holder.

Although the Osceola Resort Area Council and the Orlando-Kissimmee Hotel/Motel Association support the financing plan, several investment brokers and only one county commissioner, Kenneth Smith, say the proposal, using tax money, is too risky.

"What this deal needs right now is for Faulkner USA to step up to the plate and tell Osceola County taxpayers positively that it has the funds or will be able to get the funds to cover the cost of this venture," an Orlando banker, not associated with the deal, tells GlobeSt.com on condition of anonymity.