PRINCE EDWARD – Robert “Bob” Fowler has long had a vision for a hotel and conference center in Prince Edward County. Granite Falls, the planned towering structure, would offer something unique to the community with some 170-plus rooms.

Still, sometimes it takes time to get all of the pieces of the dream put together for bricks and mortar in the real world.

Recently, County Supervisors approved a second extension of an economic development agreement with Prince Edward Development, effectively affording another year to close the deal.

“…Those agreements expired in January and there's just no way in the world we were gonna get to a closing by January,” Fowler told The Herald in a December 14 interview. “We're figuring we'll close mid to late April. We should have all the financing commitments, we're hoping, by the end of January. And then, because of the complicated nature of the financings, it's gonna take about three months to actually get to a closing.”

Once they get all those commitments in place, he says he's praying for about 120 days of relative calm, Fowler offers with a chuckle, so they can get to a closing.

And once they close they'll immediately break ground.

There have been quite a few hurdles to get the project, figured to be built at a former quarry site just south of Farmville, to this point. Fowler recounted the history of the effort in November before the Granite Falls CDA, an entity formed to assist with special assessments on the property within the CDA district (limited to the proposed development area).

Fowler outlined before the CDA that Prince Edward Development, in October of 2008, began searching for a site in the county for a hotel and conference center; made their first presentation to the County Board of Supervisors in April 2009; entered into an agreement to purchase 94 acres from the IDA; the County rezoned the IDA's property to commercial in August of 2009 to permit the development of the hotel; VDOT approved a $1 million revenue sharing grant in October of 2009 for the relocation of Route 628 (providing an alternate access); the Board of Supervisors created the CDA to finance the public improvements related to the hotel as well as the conference center and training center in November of 2009; and in December of 2009, a market feasibility study for a 150-room hotel and entered into an economic development grant agreement between the County, IDA and Prince Edward Development. (The number of rooms has been projected to increase to 176.)

He went on to highlight that in January of 2010, Granite Falls Hospitality LLC, the owner of the hotel, was created; in May of 2010, Granite Falls Hospitality entered into letters of intent with Marriot International to brand the hotel as a Renaissance and entered into a letter of intent with Crestline Hotels and Resorts to manage the hotel; in July 2010, an update of the market feasibility study was done to reflect a room count of 176 rooms and Renaissance as the flag and Crestline as the manager; in October of 2010, the Tobacco Commission approved a $1.5 million special projects grant and a $145,000 Southside Economic Development grant for the conference and workforce training centers; in December of 2010, the CRC and Farmville Area Chamber of Commerce completed a needs assessment for the workforce training center to determine that there was sufficient need to justify the development of those facilities; in January of 2011 WM Jordan delivered a draft guaranteed maximum price for the hotel and conference center; in March, SVCC agreed to operate the workforce training center on behalf of IDA; in August, the County received bids for the relocation of Route 628; in October, the Virginia Tourism Corporation rolled out their Virginia Tourism Development financing program; and this November there was a request to create a tourism zone to access a new tourism development financing program for the hotel.

It's a journey so complicated that it's like detailing each of an octopus' tentacles to the cellular level.

The property, about 94 acres owned by the County, was transferred to the County's Industrial Development Authority in 2009 and the board of supervisors looked to the entity to work out a proposal for the board to consider. Supervisors later approved a contingency real estate contract with Prince Edward Development.

Prince Edward Development, LLC, specifically, would purchase the 94 acres at a price of $376,000, but the closing is not to occur until the construction contract for the project is executed and construction loan is closed. There were also a long list of contingencies that must also be resolved-such as rezoning the site and the creation of a new Community Development Authority (CDA) and that the purchaser is to obtain satisfactory financing commitments for the project.

In addition, the County was to provide evidence that a new State Route 628 would be constructed. Supervisors have already taken steps to build the alternate road, which would be accessible across from the County's business park off of U.S. Route 15 South and cut down on traffic through the County's school complex. That project is slated to be built in 2012 whether a hotel is in the works or not.

The cost for the new road (with a new turn lane) totals $3,472,059.06 with funding factored from the state and revenue sharing from VDOT, the County's cost was projected at $1,397,059.06.

However, if the Granite Falls project is built, it was noted in a memo in the board packet, the County would be reimbursed by either having the CDA levy a road assessment tax on the hotel in an amount equivalent to the debt service or the County can establish a special service district or transportation district and the County would levy a special assessment in the district to collect an amount equal to the debt service.

(If the hotel is not built, it was also cited, the County could still create a service or transportation district and levy a special assessment to collect a portion or possibly all of the cost from any lands that would benefit from the new road.)

Site work for the hotel project, Fowler assessed, would probably begin within a week of closing on the financing. A local contractor has already been selected.

“There's about three months worth of site work, so while he is doing the site work, we'll be finishing up…the drawings and finalizing the bids on the actual building construction,” he said. “So the building construction won't start until August or September.”

If that's a good time or not may just depend upon the winter.

Fowler was hopeful that the Route 628 project would be done by November, offering an additional access. The construction access would flow through the existing Route 628, or through the school complex.

“What we're hoping is…knowing what their schedule is, the contractors-'cause they don't want to get hung up in that traffic, so they'll time when they're coming to the site…Like they'll probably try to get to the site around 7-7:30, start early…and that way they skip all the bus traffic and then they probably won't leave 'til…4:30-5 and so hopefully will miss (the afternoon bus traffic),” Fowler said.

He also notes those coming from the east can use Old Ridge Road and come in the back way and not have any impact on the schools.

Fowler offered that if they really pushed it they could open in December of 2013.

“And that's the absolutely worst time to open a hotel,” he says.

He noted, “December or January are your two worst months from an occupancy standpoint.”

So an actual opening could stretch on into 2014-and may open doors to guests sometime in February. And, while there are several major parts-hotel, conference and training centers-the three are on track to be built at the same time.

Is it set in stone that it will be a Marriot?

“I had a meeting with them on Friday just to make sure they were still on board,” Fowler said. “They do not want us to apply for the franchise 'til we have our financing commitments. And, so what we'll do is, just based on our timetable right now, we will submit the franchise application in February, they have their committee meeting the first week of March, so we would actually get…formal approval of the franchise in March.”

He noted they've been talking to them, and they've been reviewing their plans, giving comments and they've already made “a bunch of adjustments to the plans to meet their comments and concerns.”

Asked how confident he has everything lining up financing-wise, Fowler said he is “in the mid-90s now.”

The most challenging part has been the bank financing.

“…If there's one thing that I underestimated it was the impact of this last recession on the banking industry,” Fowler said. “And just…how weak some of the large banks are from a capital standpoint, from a commercial real estate portfolio standpoint…a lot of those excesses from 2007…when they were financing 90 percent of spec buildings and…when the market turned, they're stuck with them.”

Fowler noted, “…If you haven't gone after a development loan in the last two years, it's an entirely different world out there and what was true in the past is just not true today and so we've had to sort of rethink…how we're gonna finance this and that's why we've gone back to using the CDA to finance the conference center and doing that through a tax exempt bond issue and that has allowed us to reduce the hotel loan down to 13 million.”

And that, he adds, is a key, because it allows them to get away from the big money center banks and being able to focus on regional and community banks that are in far better shape than some of the bigger banks.

Fowler detailed that they expect the ultimate ownership to be comprised of five entities, and there may be three or four people or three or four companies within a group.

Ultimately, they would have to be approved by Marriot, he said.

Fowler noted that they have identified four of the five (subject to approval), with some having been involved with hotels in the past. (The owner will be Granite Falls Hospitality, LLC, which he cited was created in 2010.)

Fowler, who has a background in banking (not so much commercial, but investment banking-municipal finances), says it's the most challenging thing he has ever put together.

“Now Prince Edward Development will be one of the owners of that entity and…we're the initial manager…,” Fowler said, offering that the owners may decide to hire a second manager as well.

Fowler worked as a consultant with the Poplar Hill CDA prior to the proposed project.

Reflecting back to 1999, he noted the original group had the vision for the golf course and a hotel/conference center. He was asked to help with the financing.

While that project came close, that original vision has not materialized.

Things could still occur that could derail this project. Though he says he's not too concerned at the moment about the U. S. economy, there are a lot of extraneous things outside of the U. S. that he notes you just have no control over.

Fowler notes that Farmville is “a really unique place. It's hard to just look at statistics and get a feel for the economy and the demand.”

He offers that “you really only get to understand the story if you spend time here.” One of their challenges, he says, is trying to convey that to banks not located here or investors interested in the project not from here.

Fowler has, himself, relocated to Prince Edward, agreeing that he's all in on this project.

The training center will offer classroom space and options for SVCC students-hospitality and culinary arts as well as other potential course offerings. Fowler noted three classrooms and a computer lab. In addition, most of the meeting space is going to be used in the daytime, so additional space may be available in the evenings.

As for the hotel, Fowler notes that they have a resort feel (they are located next to the golf course and have a spa).

“…This is just a nice central location…If you look at driving time, within three hours, you can almost be anywhere in Virginia,” Fowler said.

Fowler offers, in working with the County, that they have been super adding, “Number one, they've been patient,” he laughs. “And…they've really responded to pretty much every request…as opportunities have opened up for financing, whether it was back when the IRS allowed recovery zone bonds…They were willing to…designate the site a recovery zone to access that financing. Now we were never able to get that financing done, but they were willing to do that. The tourism zone is a perfect example…”

He noted that component is critical to the CDA financing.

The tourism zone would only include two parcels (that would be part of the planned Granite Falls hotel and conference center project) and allow the County to receive the incremental tax increase from the sales tax from any activities located with the zone. State legislators established financing for qualified tourism development projects that aims to provide a gap financing mechanism for projects in partnership with developers, localities, financial institutions and the state. The program offers a method of financing to compensate for a shortfall in project funding not to exceed 20 percent of a qualified project's cost.

The CDA's financing is projected at about $17 million, with the tourism development financing factoring about $5.5 million of that total.

Then, too, there's the economic development agreement-which Fowler notes the County had never done an agreement like that before. It spans 25 years.

“They just really have been great to deal with. They have been tough negotiators on certain points, but they've been willing to listen and if I can make… (a) good enough case, they've been willing to consider,” he said.

He adds, “…This project would not be done if it weren't for them.”

As part of an economic development agreement involving the developer, County and the IDA, the developer is to provide financing for the project, excluding the conference/training center. That is to be provided by the Authority “and certain infrastructure whose financing will be provided for by the Granite Falls Community Development Authority.”

While the County is not obligated for any bonds, notes or other financing for the project, the County will make payments to the IDA of certain incremental tax revenues. Specifically, the agreement outlines that the County will make payments to the Authority in the form of a grant-factoring 80 percent of the incremental tax increase in real estate and personal property tax revenues with respect to the project in any calendar year beyond those collected in 2009; 80 percent of the transient occupancy taxes collected in any calendar year from the project in excess of those collected in 2009; and 95 percent of food and beverage sales taxes colleted, if any, in any calendar year from the project.

The Developer is to use proceeds of the grant and any tax increment financing (TIF) to pay a portion of the costs of constructing, equipping, renovating or re-equipping the project.

The grant will end with either the TIF financing payment having been made in full, or the December 31, 2038 date.

That may seem to be a long ways off, but such is the development of a project of this size.

Fowler, at the CDA meeting, also offered that it represents a $51 million investment in the county, excluding the Route 628 project; they would “fully reimburse” the County for its share of the Route 628 relocation costs; that during construction, they would employ over 100 individuals during the 18-month period; once open, they would employ approximately 140 people, a 100 full-time equivalent; have an annual payroll of approximately $2 million; establish the first full-service hotel in the region; establish the first workforce training center in the county that will be operated by Southside Virginia Community College; pay approximately $700,000 in water and sewer connection fees (although he noted based on the article in the paper, that might be slightly over $700,000) and will require a capacity of approximately 50,000 gallons per day of potable water; and would generate approximately $26 million of net tax revenues to the County over the first 30 years of hotel operations-net of the economic development grant agreement.

Time will tell if dreams will come true.