Posted on Wed, Apr. 16, 2008

Horse park hotel project appears dead

BOND SALE DEADLINE PASSES

By Linda B. Blackford

LBLACKFORD@HERALD-LEADER.COM

The proposed luxury hotel project at the Kentucky Horse Park is apparently dead after an April 15 deadline passed without a bond sale to finance the deal.

State officials set that deadline for private developers to sell the $118 million in bonds that would make it possible to complete construction by the 2010 Alltech FEI World Equestrian Games at the park.

But, as of late Tuesday afternoon, there was no announcement of any bond sale. Neither officials at the state Finance and Administration Cabinet nor the private developers would comment on the matter.

John Nicholson, director of the Kentucky Horse Park, said that, without hearing otherwise, he assumed the deal had expired.

"I am disappointed that we will have to delay for two years efforts to make the Horse Park self-sustaining, but I am relieved there is no concern now about a construction timetable with respect to the World Equestrian Games," said Nicholson.

WEG organizers and state officials did not want any ongoing construction happening during the Games.

The games will be held for two weeks beginning Sept. 25, 2010, featuring eight equestrian world championships.

Organizers expect to sell about 700,000 tickets to individual events, but the actual number of spectators could be far less. Many spectators will buy tickets to more than one event.

However, Nicholson stressed that a some kind of hotel will eventually be built at the park, perhaps with construction beginning shortly after the World Games conclude.

The lack of sales had been blamed on a volatile bond market in a gloomy economy.

The deal was a complicated public-private venture using $118 million in tax-exempt bonds issued by the Kentucky Economic Development Finance Authority. About $75 million of those were backed by the developers, but the commonwealth could have been liable for an additional $42.17 million if the hotel doesn't succeed.

A feasibility study said the hotel would have 75 percent occupancy with room rates of $175 a night. However, local hotel managers have dismissed those projections as unrealistic. By comparison, The Marriott Griffin Gate Resort on Newtown Road has an occupancy rate of 64 percent.

The developers were eligible for a tax rebate of up to $39 million and a $3 million loan to help them make debt payments in case they ran short of cash. The tax rebate was provided by legislation to encourage private development in tourism projects.

Brad Burgess, a Florida businessman who now lives in Lexington, came up with the idea of building the 267-room luxury Westin hotel, spa and retail project with a non-profit foundation. His development group would have made a $5 million development fee on the deal.

His development group was hired by a non-profit foundation also created by Burgess that would run the project. After the debt service was paid off, the foundation would distribute any profits to local equine and tourism groups.

The Herald-Leader is pleased to provide this opportunity for readers to comment on stories and issues. However, we urge readers to avoid personal attacks or inappropriate remarks in their postings. Some of the comments may be reprinted in the newspaper. The views expressed here are not those of the Herald-Leader or its staff. Registered user names are posted for comments.