Osceola negotiating with Salamander Hotels for expansion of Reunion Grande

Oscoela County officials are in preliminary discussions with Reunion Resort management for a conference hotel expansion and luxury spa valued at more than $100 million at the Four Corners golf resort.

"For Salamander, we focus on luxury, and that means minimum four-star," said Prem Devadas, president of Salamander Hotels & Resorts, which operates and manages the Reunion Grande hotel, golf courses, hotel spa and other accommodations.

Devadas told GrowthSpotter the hotel expansion concept orginated in response to a request from the club members to enhance the resort's golf facilities. The golf club has approximately 1,000 members who enjoy access to the resort's three golf courses, tennis courts and water parks. Salamander wants to build the membership to pre-recession levels.

"We started studying this as a way to create new golf facilities that would include member-only locker rooms," Devadas said. "We're also looking for ways to create a luxurious spa that would be a great enhancement. Right now, we have a boutique spa but it only has four rooms."

The new destination spa would have 12 treatment rooms. Building a new pro shop, adding new dining options and expanding the club's fitness center were also priorities.  

"To be able to wrap all that into a hotel development could make it feasible to move forward with those improvements," Devadas said.

He said the company is considering a 200-room addition at the Reunion Grande designed specifically to appeal to business travelers, along with expansions of the hotel's existing conference and meeting facilities. The 11-story tower currently offers 96 two-bedroom suites and a roof-top pool, but it lacks single-occupancy rooms. 

"We’ve made tremendous progress over the last five years," Devadas said. "The one segment where we have room to grow further is that conference business."

Salamander has asked Osceola County for $30 million in Tourist Development Tax (TDT) funding to finance the conference center expansion. The project budget includes $21.8 million for 51,000 square feet of new conference and meeting space that would be integrated with existing space; and $16.8 million for kitchen expansion, storage and back-of-house areas.

The new spa, restaurant, golf facilities, retail outlets and other amenities are estimated to cost $11.3 million. Finally, the plan includes $12.9 million for structured parking to replace and expand upon existing surface lots.

Devadas said that by developing the right facilities, including luxurious guest rooms and complementary meeting space, Reunion would be able to compete favorably with leading destinations throughout the Southeast and Florida, bringing new groups to Osceola County that currently go to other hotels such as the Ritz Carlton, Four Seasons, and Waldorf as well as top golf resorts such as Trump Doral, PGA National, Streamsong and Grand Cypress.

Osceola County Manager Don Fisher recently briefed county commissioners on the proposal, which was under a confidentiality agreement. Commissioners gave Fisher the go-ahead to pursue negotiations with Salamander. 

A key component in the deal could be a right-of-way donation in Reunion for the future Poinciana Parkway Extension connection with Interstate 4. One of two recommended alignments extends through Reunion, linking the new toll road to I-4 at the existing S.R. 429 interchange. 

"When they came in to meet with us, I made that suggestion," Commission Chairman Brandon Arrington said. "It really made the deal so much more viable. It’s a huge cost we could be able to alleviate."

Fisher told GrowthSpotter he is actively negotiating with Salamander. The county currently has $45 million in TDT reserves, and a debt capacity of $15 million. County staff estimate the Reunion Grande expansion would create 240 new permanent jobs, and would generate up to $1.7 million a year in additional TDT revenue. 

The county has received $250 million in funding requests for tourism-related projects. Fisher said the potential right-of-way donation at Reunion "provided a unique component that none of the others had."

Salamander isn't the first to recognize the market for a conference hotel facility at Reunion. 

GrowthSpotter reported last year that Encore Capital Management had filed preliminary plans for a 300-room convention hotel just north of the resort's original water park on Tradition Boulevard. The Boca Raton-based developer received preliminary approval from the county for the project in early 2016, and later filed a Site Development Plan (SDP) for the 32-acre parcel last March.

The plan was under county review until October 2016, when the developer requested it be put on hold.

"The need for a hotel has always been there," Encore General Manager Jim Bagley told GrowthSpotter last year. "We were missing an opportunity with business travelers who still wanted to experience the resort but didn’t need all the space they get in a vacation home."

Encore is known primarily for building and selling vacation homes at Reunion, including The Encore Club. It's the same developer behind the massive Margaritaville Resort now under construction on the W192 tourism corridor. That resort combines a Margaritaville-branded hotel with more than 900 vacation homes. 

Both projects are in planning stages, as the Omni Orlando Resort at ChampionsGate gears up for the May opening of a $40 million expansion just down the street. The ChampionsGate project, which was jointly funded by Osceola County, includes a 100,000-square-foot expansion at the adjacent Osceola County Conference Center, a new villa building that adds 93 guest rooms and suites, and a host of new amenities, including a wave pool.

Salamander's expansion proposal is one of two prospective hotel projects to request TDT funds from the county.

The other, dubbed "Project Edison," is slated for an undisclosed location within the W192 redevelopment district, somewhere between Vineland Road (CR 535) and I-4, first reported here last September.

Described as a "lifestyle destination, purpose built convention and entertainment district," Edison's backers pledged a total of $750 million over the phased development of the project. That includes more than 950 high-end hotel rooms, 350,000 square feet of conference and meeting space, 250,000 square feet of four-star dining, shopping and entertainment components, 150,000 square feet of retail and 330,000 square feet of "destination entertainment."

The developer has asked the county for $67.5 million for the construction of the expo center with a lease-back commitment.

"The ask on this one would be for the county to fund the one component of the project the TDT could fund – and that would be the conference space," Fisher recently told commissioners. "They would commit to at least one five-star hotel, which the county doesn’t currently have, and a $750 million capital investment."

Last September, Osceola's W192 Development Authority approved a $75,000 catalyst grant for Project Edison and contracted with GAI Consultants to assist the developer with site planning.

County commissioners said they felt the project needed more vetting. Commissioner Fred Hawkins said he asked the Edison group which conventions they could lure from Las Vegas and New York. "And I didn't get an answer," he said.  

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407)420-6261, or tweet me at @LKinslerOGrowth. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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