Plans are being fast-tracked for the first new luxury hotel neighboring Disney World property since 2014, a prospective 17-story JW Marriott in Bonnet Creek Resort that would boast highway frontage and access to the theme parks.
Randall F. Greene and DCS Real Estate Holdings, the South Florida developer behind Bella Collina and other high profile Orlando-area projects, own the land through an affiliate and are preparing plans now for Orange County, Greene confirmed for GrowthSpotter on Tuesday. He declined to comment on details about the hotel, or its flag.
Contact by Greene's team in recent months with county and water management officials offers insight into the plans.
Projected as 516 keys with 50,000 square feet of meeting space, the hotel would occupy a 10.6-acre site on the eastern end of Chelonia Parkway, facing Interstate 4. The property lies within the Bonnet Creek Community Development District, directly east of the Waldorf Astoria and Hilton Orlando Bonnet Creek.
The Chelonia Parkway site lies a direct 6.9 miles southwest from the existing JW Marriott Orlando, Grande Lakes (11.4 miles by road), just outside the sphere of protection that allows this flag to be contracted for another hotel.
Projected investment in the new hotel can be estimated at more than $300 million, based on similar JW Marriott developments in recent years, and a $360 million budget for The Four Seasons Resort at Walt Disney World that was announced in 2011 and built in 2014.
Greene's RG Developments & Investments is known as a well-capitalized developer. It's the co-owner on multiple Florida real estate projects with DCS Real Estate Holdings, which is controlled by Dwight C. Schar, a minority-stake owner of the Washington Redskins and founder of NVR Inc., a large national homebuilder that operates under the Ryan Homes brand.
The Chelonia Parkway site is designated for hotel and conference center use within the Bonnet Creek PD zoning. A recent change to that PD increased the conference square footage by 50,000 square feet, approved in early April by Orange County Commissioners.
Bonnet Creek Venture, Ltd., the declarant of that PD, would have to approve of the new JW Marriott plans. It was behind the conference space increase in recent months that sets the stage for this project.
The new JW Marriott would be a luxury resort on par with the other JW Marriott at Grande Lakes, one of 34 hotels in Greater Orlando given the Four Diamond rating by AAA in 2017. The Four Seasons Resort at Walt Disney World is the only local property with a Five Diamond rating.
Amenities at the new resort may follow the standard lineup by JW Marriott, which include the "Spa by JW," three full-service restaurants, a few bars and quick-service dining options, fitness center, swimming pool and outdoor sport courts.
Demand for new luxury convention resort properties is clear to hospitality investors after little of such product has entered the Orlando market following the recession, said Michael Weinberg, director at HFF Orlando who specializes in hotel sales and financing.
"In 2008 and 2009 we had 6,000 rooms delivered all in the same vein, those included the Waldorf and Hilton at Bonnet Creek, the Hilton Orlando near (OCCC), and the Peabody expansion that is now the Hyatt Regency. So you had all these big convention box hotels delivered at the same time, and a really bad time in the cycle," he said.
"Coming out of the cycle we haven't seen any of these big-box, full-service properties delivered but the Four Seasons (in 2014), and even it has a limited number of rooms (444) so they can drive rates at the top of the market. So there's a need, and no new product that is competitive at that level."
Locating within the Bonnet Creek district gives a developer special access to Disney's growing theme parks while still being able to own land, compared to hotel owners on Disney property that must sign long-term land leases.
"And having the Four Seasons prove that new luxury does work in Orlando is a big factor for this project," Weinberg said.
Market-wide occupancy levels for Orlando's luxury hotels broke the 80 percent threshold in 2016 and have been trending upward for the past six years, according to Don Stephens, managing director for HVS' Orlando office.
In terms of average rate, those properties are near $300 on aggregate, up 4 percent from 2015 with a growth pace that should continue this year, he added.
The luxury segment in Orlando comprises eight properties and just over 5,400 rooms, accounting for roughly 4 percent of the market's hotel inventory.
Those eight assets are the Four Seasons Resort, Loews Portofino Bay Hotel, Loews Royal Pacific Resort, Sapphire Falls Resort, the Waldorf Astoria, the Villas of Grand Cypress, and sister properties the JW Marriott and Ritz-Carlton at Grande Lakes, per HVS.
When the Four Seasons Resort opened its 444 rooms in Third Quarter 2014, the new supply was quickly absorbed, said Stephens, suggesting unmet demand continues in the luxury hotel market.
The proposed new JW Marriott will not include a condominium residences component, which Marriott started to introduce to new JW projects in the past two years, including the planned JW Marriott Residences in Clearwater Beach.
Greene's development focus on Chelonia Parkway seemingly moves to the backburner a 20-acre site on Westwood Boulevard south of the Orange County Convention Center, which a DCS affiliate bought last November and had been planning a convention-level hotel tower with 1,000 to 1,200 keys.