The board that governs the Georgia World Congress Center voted Tuesday to pursue a pre-development agreement with a Boston company for a hotel at the downtown convention center, an important step as the state agency crafts plans for the 1,010-room high-rise.
The vote sets the framework for negotiations between Georgia World Congress Center Authority and Drew Co., the authority’s private sector partner. The project is expected to rise on part of the site of the former Georgia Dome, which was demolished this month.
The hotel will be owned by the Congress Center Authority, said Frank Poe, the agency’s executive director. The board reached the decision on ownership after about a year of study.
The project is not to exceed $380 million in cost. A prior estimate put the project at about $260 million when it was a 800-room project.
Poe said the board examined other government-owned convention center hotels in Chicago and Houston and determined that state-ownership was the preferred path because it generates for revenue for the facility. That money can be used for convention center upgrades, he said.
Last March, state lawmakers approved $400 million in new bonding capacity for the authority to use to build the hotel. The bonds would be repaid by hotel operations.
The bonds, which would be tax-exempt, would be project-specific and not backed by hotel-motel taxes or state taxpayers, Poe said.
“It makes the project itself stand on its own two feet,” Poe said.
Poe said his aim is to return to the board within 60 days to 90 days with potential brands for the hotel, a refined project scope, additional site analysis, a project budget and “financial sensitivity analysis” that would define the financial potential of the project under different economic scenarios.
“Because this is a long-term investment, you are going to want to know what impacts the economy has both on the upside and the downside of the property,” Poe said.
Pending approval by the board, the authority would then seek a development agreement and determine a guaranteed maximum price.
Construction could start after the Super Bowl in 2019, Poe said.
In about a year, crews are expected to convert most of the old dome site into the Home Depot Backyard, a 13-acre green space that will be a community park most of the year and a premium tailgating site for Atlanta Falcons games, Atlanta United matches and other big events at Mercedes-Benz Stadium. The hotel would be constructed on about one acre of the site.
Planning for the hotel has been underway for several years. It’s part of a strategy by the Congress Center to overtake other convention facilities across the country, which have added lodging and other amenities in the unending race to win big meetings business.
The city’s hospitality sector suffered during the Great Recession as companies cut expenses. But Atlanta’s convention business boomed during the recovery as companies again turned on the spending spigots to send workers to meetings and training seminars.
But business has plateaued. Visitation is expected to be flat in 2018, although the city will be buoyed by upcoming events such as the College Football National Championship game in January and the Super Bowl in 2019.
William Pate, the CEO of the Atlanta Convention and Visitors Bureau, said the future hotel, along with new attractions such as the Center for Civil and Human Rights and College Football Hall of Fame, make the city more competitive and an easier sell to meeting planners.
MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.
AJC Business reporter J. Scott Trubey keeps you updated on the latest news about economic development and commercial real estate in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:
- Phipps Plaza in Buckhead is about to get a major makeover
- Mercedes USA HQ in Sandy Springs speeds toward March grand opening
- Documents hint at massive downtown Atlanta project near Philips Arena
Never miss a minute of what's happening in local business news. Subscribe to myAJC.com.
In other local development news: