Encore Funds, developer of the newly proposed Margaritavillage resort in Osceola County, expects its 304-acre mixed-use development to top $500 million in buildout costs over the next two years, but eyes at least $800 million in return from the property's home sales, commercial lots, themed water park and more, the company's managing director told GrowthSpotter.
The project will be a prime candidate for upfront funding from the county for construction and signage costs, as well as property tax abatements over the next decade, by way of a new incentives tool the W192 Development Authority has made available to developers since May.
"The opportunity this project offers to breathe new life into vacant property is a game-changer," said David Buchheit, executive director of the county agency charged with redeveloping a 15-mile stretch of W. U.S. 192.
"This site falls within a designated leisure area of our master plan, so they would automatically win points in our evaluation tool for ideal redevelopment of the area," he continued. "The property taxes that project could generate and its snowball effect on redevelopment are huge."
Encore, a real estate private equity firm based in Boca Raton that's one of the largest developers of vacation rental homes in Osceola County today, spent $24.05 million in March 2013 on four parcels totaling 304 acres of undeveloped land, along with vandalized remains of the old Splendid China property, of all which lies southeast of the SR 429-W U.S. 192 intersection.
For more than a year, all the developer had in mind were more vacation homes.
But when Princeton University alumni and college friends John Cohlan, CEO of Margaritaville Holdings, and Bill Powers, managing principal of Encore Capital Management, touched base 15 months ago, it led to the brainstorming and theming of a resort community that could deliver an immersive environment for fans of Jimmy Buffett -- almost a Walt Disney World for "Parrot Heads."
"Margaritaville is now a lifestyle brand, and we were able to conceive a whole resort that offers escapism for fans of this brand," said Jim Bagley, managing director with Encore Funds.
The result is a projected $500 million themed resort dubbed Margaritavillage, which will include a 175-room Margaritaville hotel (to be the company's fifth), 500 or more vacation rental homes with Jimmy Buffett-inspired design, a beach area and 12-acre water park, among other amenities.
The development will also feature 170,000 square feet of retail on the 27-acre parcel that has frontage on W. U.S. 192, with Encore's commercial division now pursuing boutique shopping, restaurant and bar lease tenants for buildout, said David Hurst, retail coordinator for the project.
An affiliate of real estate development and management firm Encore Capital Management, Encore Funds will likely fund the entirety of the Margaritavillage project, though Bagley said he's open to "creative investment offers." Dave Schmidt Engineering is civil engineer on the project; no architect or general contractor has been selected yet.
Necessary zoning for the property is in place, and Encore is now going through the Planned Development application process, which Bagley expects to finish by year's end. Pre-construction site work and utilities could begin in early 2016, with vertical construction as soon as the third quarter of 2016.
Through its subsidiary Encore Development, Bagley and Encore Funds planned last year to develop a mixed-use residential resort on the property to be named Rolling Oaks, a project The Orlando Sentinel was told at the time could start in August 2014. It was the first sign of serious development on the Splendid China property since it closed in 2003.
"Splendid China was a great attraction while it was here, but now that it's gone and there are large heads out spray-painted on the perimeter, it's a sign of blight," said Buchheit of the W192 Development Authority. "To have that redeveloped means we are removing lingering blight from Formosa Gardens Boulevard."
The property has potential roadway access via Rolling Oaks Boulevard, which runs through a Super Target shopping center that borders it to the north, direct access from W. U.S. 192 to the north, Funie Steed Road to the south and Formosa Gardens Boulevard to the southeast, where it borders the former Splendid China theme park parcel.