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Wednesday, March 9, 2011 - 12:03pm

Savannah Debates Public Funds For Hotel

Savannah's Chatham County is considering building a new convention hotel near its Trade Center on Hutchinson Island.

Officials moved closer to an agreement Wednesday over how much public financing the project should get.

When officials first proposed a new hotel five years ago, they had no doubt, it would be privately-financed.

But as the recession deepened and banks became more cautious, they started considering a public role.

That eventually swelled to a proposal to increase the hotel tax.

The Trade Center Authority Chairman Mark Smith was among hotel owners who thought it unfair to tax hotels to finance the competition.

"There are a number of financing options for this project from 100% private financing to 100% public financing," Smith said. "We moved more toward the middle of that range today."

Two proposals presented at the March meeting of the Trade Center Authority board didn't mention a hotel tax.

They also brought the amount of guaranteed public loans down to between $50 and $111 million dollars.

A county commissioner, however, pressed for clarity so developers could seek more private financing.

"They're not going to be able to go to the capital market without some soft committment," said Pat Shay, who also sits on the authority board. "So, if we have a preference [among the options], we need to express that."

Smith said that he wasn't willing to chose among options that were just presented to him.

Board members approved his motion to schedule a day-long workshop about the hotel before their April meeting.

"We're moving in the right direction," Smith said. "At the end of the day, we've got to approach this project as one community."

County officials consider the new convention hotel important to Savannah's efforts to attract more large meetings.

Those meetings are a major driver of economic activity in the Historic District.

There's currently only one Hotel, the Westin Harbor Resort, on Hutchinson Island, where the Savannah International Trade and Convention Center is located.

Developers don't expect the new hotel to be open for business until 2013.

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