New financiers expected for civic center
Original backers left months ago
While the original private financiers of the hotel/civic center project have backed out, parties involved in the project say they are confident that it is still viable with new private financiers expected to step in soon.
Nobel-Investment Group, an Atlanta-based development company, had originally agreed to contribute $9 million into the building of a 100-room Courtyard by Marriott Hotel to be located next to the new Administration Building which is located at the intersection of Pace Street and Usher Street.
The large hotel was to accompany a 1,200 seat civic center and a conference center with 6,000 square feet of meeting space which would be owned and operated by the county and the city of Covington.
A year ago the total cost of the hotel/civic center project was estimated to be $24 million. However with the rising costs of both construction materials and labor that cost has likely risen.
“We can’t believe that it will remain the same,” said Covington/ Newton County Chamber of Commerce President John Boothby. “We think it will have to go up because everything has gone up within the last year.”
In December 2006 the county Board of Commissioners and the Covington City Council unanimously approved a measure to back the authorization of up to $12.1 million in bonds to be issued by the Newton County Industrial Development Authority.
In addition funding for the project was to come from a $5 million Special Purpose Local Option Sales Tax allocation and hotel/motel taxes which were expected to contribute $3.5 million.
According to Boothby, Nobel backed out of the project some six to eight months after the county and city voted to back the bonds.
“The reason they gave to us is they thought it was a good project, but it was now too small for their appetite of investment,” Boothby said. “Their company growth has been so significant now they were looking for more significant projects. They never lost faith in the project. They have told us ‘we think it’s an excellent project and an excellent location.’”
Since then Boothby said the project’s joint task force, which includes county commissioners, council members and civic leaders, has been in talks with several other private developers.
“I want to stress that no one has waited a minute on this project,” Boothby said. “Since last year we’ve had tons of meetings, phone calls, visits and letters. It’s a very complicated and time-consuming project.”
According to the original timeline of the project, construction was originally expected to begin sometime this fall or winter once the new county Administration Building was completed and the old administration building torn down. The hotel/civic center will be built in the location of the old building.
One of the main complications of the project is the question of suitable parking. Parking for the hotel/civic center is expected to be located at the former Bell South/AT&T parking lot which the city of Covington obtained the use of through a land swap lease agreement in February.
The county is also looking into obtaining some parking space on land currently owned by Norfolk Southern Railway which would be located on the north side of the hotel/civic center.
“Parking is an issue from a hotel point of view,” Boothby said. “We think we have significant parking; only they (the developers) can answer if it’s close enough.”
Further complicating negotiations with the developers is the fact that the size of the hotel must be close to 100 rooms as was originally agreed to by the county, city and IDA. A smaller hotel would likely not bring in the same taxes which would make it more difficult to retire the debt on the civic center.
“We’ve got an agreement on a certain size hotel to help insure as best we can the revenue stream that will help retire the bonds,” Boothby said.
Whether or not the hotel will be a Courtyard by Marriott hotel also remains to be seen. Other hotel brands which have been mentioned include a Hilton Garden or a similar upscale Hyatt product.
“ There are other hotels that are interested,” Boothby said. “It’s going to depend on the developer. It definitely is going to be a higher quality property. That’s part of the cache. It takes more work to get higher quality properties in the community, but we think it’s worth it.
According to Boothby, three main things remain to be sorted out before construction on the hotel/civic center can begin. The land from Norfolk needs to be acquired, the old administration building must be torn down and the site cleared and a private developer needs to be selected.
“ Without exaggerating I cannot recall a more complicated project I’ve worked on in 25 years,” Boothby said. “All parties have shown the willingness to do the heavy lifting to make this work.”
A meeting between the project task force and two private developers interested in contributing funds for the project is scheduled for next week said Boothby. During the meeting both developers are expected to make presentations to the task force on why they should be selected to take part in the project.
After the presentation, Boothby said he expects the task force to choose one private developer to replace Nobel’s role in the project.
The hotel/ civic center is expected to be a large economic draw for the county as there is no other performing arts center combined with an upscale hotel east of Atlanta. The closest civic center is in Stone Mountain and it has only 120 seats.
While it would be a much simpler thing to build a hotel close to the interstate, the anticipated benefits of having it in the heart of Covington’s downtown central business district alongside the civic center outweigh the project’s difficulties said Boothby.
“This is far more difficult, far more complicated and far more beneficial to Newton County by having it here,” Boothby said. “When we’re successful, it will make a difference for years to come.”