Good news for the Airport Hyatt!
Airport Hyatt gets OK
Construction to begin this summer
Carlton Proctor • email@example.com • December 18, 2008
Innisfree Hotels won approval Wednesday for a Hyatt Place Hotel to be built on a piece of land owned by Pensacola Gulf Coast Regional Airport.
Julian MacQueen, owner of Innisfree, said Global Hyatt Corp. executives notified him his company would be awarded the hotel franchise, the first in the Pensacola market.
"We've got our anchor hotel now. And as soon as the site is turned over to us, which I expect to be in mid-July, we will start developing the property," he said.
Airport Director Frank Miller said the site would be turned over to Innisfree in late spring or early summer upon completion of the new rental car service facility, a few blocks north of the proposed hotel site.
The 127-room Hyatt Place would be the centerpiece of a $24 million development that MacQueen hopes eventually will include upscale shops, restaurants and professional offices.
Hyatt's OK comes less than a month after MacQueen won a divisive 7-3 City Council vote granting a 50-year lease for the 11.44-acre site at the main entrance to the airport.
At that council meeting, MacQueen's bid for the lease ran into stiff opposition from rival developers Jim Cronley and Tony Terhaar, who said the land was undervalued and terms of the lease were unfairly favorable to MacQueen.
Despite their protests, Miller said on Wednesday the awarding of the Hyatt franchise to Innisfree was good news for the airport.
"We have a signed contract with Sandspur Inc., (a division of Innisfree) and there's not really anything else to do," Miller said. "It's a good deal for the airport and I'm looking forward to the start of construction."
Hundreds of jobs
When the land is turned over to Innisfree later next year, MacQueen said his company intends to spend approximately $1.5 million in infrastructure improvements getting it ready for development.
He estimates the hotel should be ready for occupancy in 2011, and outparcels within the 11.44 acres will be available to potential tenants by the summer of 2010.
The hotel project will have a significant impact on the local economy, said Jeff Townsend, president of Innisfree Development.
"We expect to have over 500 individual tradesmen involved during construction of the various improvements and permanently employ over 235 people at these six businesses with over $4 million in payroll," he said. "I estimate the total investment in the project to be approximately $24 million."
Hyatt spokeswoman Katie Rackoff said approval by the company's franchise review committee "allows us to begin negotiating the details of our franchise contract with Innisfree Hotels."
She did not indicate when those negotiations would start or how long they would take to complete.
Rackoff also declined to discuss the company's review process criteria that led to the approval of MacQueen's franchise.
The Hyatt Place Hotel is a new brand of Global Hyatt, headquartered in Chicago.
The Nov. 20 City Council vote on MacQueen's proposal was complicated by the last-minute discovery by Airport Director Frank Miller of two additional appraisals that estimated the land's value at $7 million.
MacQueen's original lease agreement with the city was based on a single appraisal that priced the land at $6.48 million. He subsequently agreed to accept the higher appraised value and renegotiated his lease based on that $7 million estimated value.
The deal also was hurried by a Nov. 28 Hyatt deadline MacQueen said had to be met to avoid a delay of several months.
Darren Page, Hyatt's director of hotel development, said the Nov. 28 deadline was "absolutely" firm if MacQueen's Innisfree was to gain approval before the end of the year.
"Our franchise review committee meets only a few times a year," Page said. "And in preparation for that meeting, Mr. MacQueen had to have everything completed and submitted in order for the deal to go through."
Despite the continuing controversy over how the airport property value was calculated, MacQueen said the deal is a good one for the city and the airport.
"I think Frank Miller and (Assistant City Manager) Robert Payne did an excellent job insisting on a percentage of sales to determine the rents," MacQueen said. "The real economic driver here is getting non-airline revenues to flow to the airport.
"This is a well-thought-out strategy to keep Pensacola's airport No. 1 in this ... market."