Osceola County is rebooting its search for developers to build up to three hotels at Osceola Heritage Park, across from NeoCity.
Procurement Director Rebecca Jones issued a Request of Letters of Interest Monday morning for hotel and commercial development teams for three hotels, including one full-serve conference center, at the county-owned park that hosts annual events such as the Mecum Auto Auction, Silver Spurs Rodeo, the Country Thunder music festival, and that serves as the training center for the Orlando City Soccer Club.
The RFLOI seeks development proposals for two upper mid-scale hotels in addition to the conference center hotel, which would be built on 2-3 acres next to the OHP Exhibition Center and new parking garage. The hotel should 150-250 rooms, though it could be built in phases. It should have a full restaurant and bar, a business center, a fitness center, a pool and up to 5,000 square feet of flexible meeting space.
The limited service hotels would be located at the primary entrances to the park, at the intersections of Fortune Road and Bill Beck Road. They could be located at each intersection or be built side-by-side with shared amenities and parking. Each should have 150 rooms and some suites, a breakfast bar and lounge, 3,000 square feet of flexible meeting space, a fitness center and pool.
The proposal allows respondents to apply for one or multiple sites.
This is the third time the county has gone out to the market seeking hotel development partners for the OHP campus. The first RFLOI in 2016 garnered just one response, and the county elected not to negotiate with the developer. The county received three bids when it reissued the solicitation in 2019, and gave the highest scores to the team led by Riviera Point. Negotiations kicked off later that year but stalled over 2020 and 2021 due to the Coronavirus pandemic and the death of county planning director Kerry Godwin. The firms resumed negotiations in early 2022 and submitted a proposed developer agreement in the spring.
The developer had sought to revise the scope to build the first two hotels — a Tryp by Wyndham select-service hotel and a second limited-service hotel with shared parking and amenities — at the Fortune Road site while moving the full-service hotel to the Bill Beck Boulevard site. They also proposed to develop 30,000 square feet of retail and restaurants at the Fortune Road site. Carlos Jose Chuman, executive vice president of Riviera Point, told GrowthSpotter that their market studies determined that the additional retail component was needed to enhance the hotel project.
“Riviera Point submitted a development agreement back in May which reflected the latest mutually consented site plan that included a retail and restaurant component,” he added. “However, said agreement proved to be legally challenging for the County to execute since the initial RFP did not include in its scope a retail and restaurant component. And therefore it couldn’t be approved, and a new RFP that broadens the original scope will need to be requested, in which Riviera Point is invited to participate again.”
Jones said the newly reissued RFLOI has been refined and updated to reflect the current development conditions. The following was added to the new RFLOI: The associated food and beverage commercial site(s) should also be of high-quality construction and provide commercial infrastructure in keeping with the quality of the hotel developments.
The previous solicitation also had included a potential fourth hotel site in NeoCity, but that was eliminated from the program. It’s expected that Sciame Construction and co-developer Edward J. Minskott Equities will include a hotel as part of their master plan for the NeoCity smart city center. Frank Sciame presented their updated vision for the first 25 acres to the Board of County Commissioners in July.
While it appears Riviera Point will be miles ahead of any competing letters of interest, it’s unclear whether the solicitation will garner any serious competition to the original bidder.
“I think it’s going to be fairly limited, and it’s not indicative of whether the asset would succeed,” Berkadia Managing Director Michael Weinberg assessed. “It’s indicative of the capital markets being challenging and much more difficult to capitalize debt structure.”
Weinberg said the Kissimmee-NeoCity market has several things going for it. “There’s tremendous growth going on in and around that submarket,” he noted, citing the $1 billion Sciame project and the $50.8 million grant from the Biden administration to expand semiconductor manufacturing in NeoCity.
The post-COVID tourism economy in Central Florida has rebounded strongly, especially with regard to leisure travel and business, to some degree. “The last piece of that will be international demand, and that should be boosted by the opening of Terminal C,” he added.
But those positive factors are offset by the negative forces of inflation and higher interest rates. He offered a sober assessment of the RFLOI.
“I’m a little skeptical of the full-service (hotel) because those are really expensive to build, and there has to be strong demand at high (average daily rates),” he said. “Some of these select-service assets these days are so beautiful they almost feel like full-service.”
The proposals can be viewed on the county’s VendorLink website and are due Oct. 25, 2022.
Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.
