News Summary
The Savannah Convention Center Authority has updated its hotel-motel tax agreement with the city to finance a new hotel on Hutchinson Island. This amendment, approved by the Savannah City Council, will allow the SGCCA to utilize hotel-motel revenues for bond repayment to support the hotel’s construction. The project is crucial in meeting the demand of convention attendees, increasing the total accommodations on Hutchinson Island to around 850 rooms, after building the new hotel featuring 445 rooms.
Savannah – The Savannah Convention Center Authority (SGCCA) has amended its hotel-motel tax agreement with the city to facilitate the financing of a new hotel on Hutchinson Island. This amendment was approved by the Savannah City Council on Thursday, following action by the SGCCA board on Wednesday.
The significance of this amendment lies in its role in securing bonds necessary for the hotel’s construction. The extension of the agreement will last until 2058, aligning with the anticipated bond term.
- The SGCCA can now use hotel-motel revenues to repay the bonds associated with the new hotel.
- Chairman Mark V. Smith emphasized the need for specific city approval and provisions on revenue use for the project.
- The Savannah Convention Center receives a share of hotel-motel tax revenues, which support its operations.
- Currently, the city allocates 37.5% of these revenues to its general fund, translating to $49.4 million for Savannah’s adopted 2025 budget.
- The convention center is projected to receive $6.9 million from this budget.
Financing for the hotel will involve bonds issued in three stages. The first two stages will be backed by expected hotel revenues, while the third tranche, approximately $65 million, is the SGCCA’s responsibility for repayment. The authority holds about $26 million in cash reserves and plans to allocate $10 million into an escrow account to support this third tranche, with hotel-motel revenues available for replenishment if needed.
The planned hotel, featuring 445 rooms, aims to meet rising demand from convention attendees, complementing approximately 400 existing rooms at the Westin Hotel nearby. The total accommodations on Hutchinson Island, post-construction, will rise to about 850 rooms.
This hotel project is positioned as an essential component of the convention center’s success, which underwent a significant expansion costing $276 million. The extension of the convention center is expected to host national groups, enhancing bookings and facilitating larger conventions. Currently, 146 events have been booked through the end of the decade.
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Additional Resources
- Savannah Now: Savannah Convention Center Authority Takes Step to Secure Hotel Financing
- Wikipedia: Savannah, Georgia
- AJC: Renderings of Big Planned Hotel Next to Savannah Convention Center Revealed
- Google Search: Savannah Convention Center hotel
- Savannah Now: Savannah Economy Hit by Hurricane-related Impacts in Q3
- Google Scholar: Savannah hotel tax
- Savannah Now: Savannah City Council Passes 2% Hotel-Motel Tax Increase
- Encyclopedia Britannica: hotel motel tax
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