Xentury City Loses Convention Center Contract

KISSIMMEE, FL-After eight years of fruitlessly trying to find a convention center developer, Osceola County government officials are back at the negotiating table today after voting 3-2 Monday night to break contract talks with Orlando-based Xentury City Development Co., a firm it has done business with for 20 years.

Instead, county commissioners have started talks with their No. 2 developer choice: Austin Convention Center builder Landmark Organization Inc., of Austin, TX. If talks break down with Landmark, the commission could go to its No. 3 selection, Orlando-based Tempus Resorts International, or scrap the $100 million, 500,000-sf convention concept completely.

If built at all, the convention center won’t be breaking ground until early 2004 with expected completion in 2006, area construction industry estimators familiar with comparable projects tell GlobeSt.com. Xentury had planned to have the center open for events by early 2005.

The county’s decision to sever ties with Xentury City hinged on two issues: complete ownership by the county of Xentury’s donated 30 acres and unproven allegations of ties to terrorist-related groups against Xentury’s parent, Xenel International of Jeddah, Saudi Arabia.

Even Gov. Jeb Bush’s office became involved in the controversy, urging Osceola County commission chairman Paul Owen to base the county’s decision on business factors and not on international politics.

However, before a televised packed chamber of residents and activist groups Monday night, Owen and commissioners Ken Shipley and Atlee Mercer voted against Xentury. Commissioners Chuck Dunnick and Ken Smith stuck with the developer.

Xentury City had offered to donate a 30-acre, $30 million parcel on its 400-acre property on Osceola Parkway and International Drive South, providing the county could stipulate the land would be used exclusively for a convention center and not turned into a flea market or low-income producing commercial venture if the convention center failed or closed in later years.

But county officials insisted on owning the land without contingency strings attached. Xentury, planning a $2 billion commercial/retail/hotel venture nearby, had to have the clause inserted in the land contract to protect its own property in later years, Susan Lawrence, Xentury City vice president/marketing, tells GlobeSt.com. “No developer/owner could or would agree” on a comparable land gift without some protection to its own assets, she says.

Lawrence says Xentury City has no appeals avenue to challenge the commissioners’ decision since the contract talks were generated by a formal request for letters of interest. Xentury and the county hadn’t signed a contract at this stage.

Xentury also won’t take the commission to court. “Suing isn’t really our style,” Lawrence tells GlobeSt.com. “We are here for the long haul and we like to think that we can be appreciated for our knowledge and our proven ability to deliver.”

She says, “If, for some reason, the county chooses to overlook that and takes a chance on an unknown, that is that.” Lawrence tells GlobeSt.com Xentury wouldn’t sue “on the basis of a business point” decision by the county but could consider legal action if the county’s decision were based on discrimination. “That we can’t and won’t stand for, as a matter of principle,” Lawrence tells GlobeSt.com.

If Landmark Organization builds the convention center, the project will be at Osceola Parkway and State Road 535, still near Disney but nearer to the smaller mom-and-pop hotels and motels along U.S. 192.

Neal Kwatra, a senior research analyst for Washington, D.C.-based Local 362 of the Hotel Employees and Restaurant Employees International Union, tells GlobeSt.com Osceola commissioners “made a sound business decision” in halting negotiations with Xentury City.

“They made certain criteria clear to all of the developers in their initial Request for Letters of Interest,” Kwatra says. “Some of their comments at last night’s meeting seemed to suggest that they did not believe Xentury City’s proposal adequately met those criteria.”

The union representative says elected officials in Osceola County are “clearly focused on bringing about the greatest possible return on the county’s investment for this project.”

Local 362 started the entire controversy two months ago by disseminating terrorist group-related information found in nationally published documents to Osceola County commissioners. The union itself emphasizes it has never accused Xentury City Development Co. itself of having ties to Osama bin Laden’s organizations.

Xentury maintains the union started the controversy because it was not pleased with preliminary contract talks Xentury was having with Local 362.