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08 March 2009
New Resort For Arizona
Mar/12/09 06:01 AM Filed in:
Construction
March 12, 2009
Gaylord gets OK for resort in ArizonaBy Wendy Lee THE TENNESSEAN
Gaylord Entertainment Co. received the green light from Mesa, Ariz., residents to build a resort and convention center there after voters approved giving the Nashville-based company a $44 million hotel bed tax incentive package this week.
The incentive package was part of a proposition approved by 84 percent of Mesa voters, in a special election Tuesday, according to unofficial election results.
Gaylord said it would build an estimated 1,200- to 1,500-room hotel with more than 200,000 square feet of meeting space. The cost has been estimated at more than $750 million.
The hotel chain has not locked in a specific development schedule yet.
In order to receive the tax incentives, Gaylord would need to complete construction by Dec. 31, 2014, according to the City of Mesa. Gaylord's hotel and convention center would be part of a larger development by Scottsdale-based DMB Associates to include venues such as another hotel and golf course.
The incentives will give Gaylord 2 percent of the city's 3 percent hotel bed tax, money that will be used to promote the Gaylord property and the Southeast Mesa region for tourism.
Some analysts said the Mesa vote gives Gaylord a chance to expand its business at a time when construction costs could be cheaper.
"Phoenix historically (has) been a high demand convention market and is today in a position to benefit from larger than normal municipal concessions and lower construction costs," wrote Jeffrey Donnelly, a senior analyst with Wachovia Capital Markets in a research note.
Donnelly said he suspects Gaylord's logic is for minimal capital expenditures in 2009 to 2011 and to line up future growth opportunities to enhance value.
Timing could also work in Gaylord's favor, said Michael Hughes, vice president of research and consulting for Tradeshow Week magazine.
The convention and meeting industry experienced a slowdown in the third and fourth quarters last year, but it's likely that two years later the marketplace will turn around, Hughes said.
"If they were to open it within that time frame, I think that could be good timing," Hughes said. "The meetings industry should be pretty healthy and growing by then."
Gaylord's stock closed at $5.94 a share, up 2 cents, in trading on Wednesday on the New York Stock Exchange.
Gaylord gets OK for resort in ArizonaBy Wendy Lee THE TENNESSEAN
Gaylord Entertainment Co. received the green light from Mesa, Ariz., residents to build a resort and convention center there after voters approved giving the Nashville-based company a $44 million hotel bed tax incentive package this week.
The incentive package was part of a proposition approved by 84 percent of Mesa voters, in a special election Tuesday, according to unofficial election results.
Gaylord said it would build an estimated 1,200- to 1,500-room hotel with more than 200,000 square feet of meeting space. The cost has been estimated at more than $750 million.
The hotel chain has not locked in a specific development schedule yet.
In order to receive the tax incentives, Gaylord would need to complete construction by Dec. 31, 2014, according to the City of Mesa. Gaylord's hotel and convention center would be part of a larger development by Scottsdale-based DMB Associates to include venues such as another hotel and golf course.
The incentives will give Gaylord 2 percent of the city's 3 percent hotel bed tax, money that will be used to promote the Gaylord property and the Southeast Mesa region for tourism.
Some analysts said the Mesa vote gives Gaylord a chance to expand its business at a time when construction costs could be cheaper.
"Phoenix historically (has) been a high demand convention market and is today in a position to benefit from larger than normal municipal concessions and lower construction costs," wrote Jeffrey Donnelly, a senior analyst with Wachovia Capital Markets in a research note.
Donnelly said he suspects Gaylord's logic is for minimal capital expenditures in 2009 to 2011 and to line up future growth opportunities to enhance value.
Timing could also work in Gaylord's favor, said Michael Hughes, vice president of research and consulting for Tradeshow Week magazine.
The convention and meeting industry experienced a slowdown in the third and fourth quarters last year, but it's likely that two years later the marketplace will turn around, Hughes said.
"If they were to open it within that time frame, I think that could be good timing," Hughes said. "The meetings industry should be pretty healthy and growing by then."
Gaylord's stock closed at $5.94 a share, up 2 cents, in trading on Wednesday on the New York Stock Exchange.