Published in Pensacola News Journal November 23rd 2012
By Carlton Proctor
On a cold, overcast morning in Fort Walton Beach earlier this month, ground was broken for a new hotel. Normally, an event of this nature wouldn’t be covered by the Pensacola News Journal; our circulation area is almost exclusively within Escambia and Santa Rosa counties.
But this was no ordinary hotel groundbreaking. What makes the $25 million Holiday Inn Resort, Destin West project so interesting — and instructive — is how developer Julian MacQueen put the unusually creative project together.
Founder and CEO of Gulf Breeze-based Innisfree Hotels, which employs 1,000 and manages 2,100 hotel rooms, MacQueen has mastered the art of the deal. And no more so than with this project. “It truly takes a village to keep something like this on track,” MacQueen told the audience attending the groundbreaking. “The tenaciousness of our partners made this happen.” The hotel is being built on Gulf-front property owned by the Air Force and made available for development under the Department of Defense program called Enhanced Use Lease.
The five-year-old program is designed to open up surplus military properties to private sector development. To get the deal off the ground, MacQueen had to convince Pennsylvania-based dck Worldwide to sign on as co-developer and build the 152-room hotel. Innisfree will provide development services and manage the hotel. For financing, MacQueen brought together Pen Air and Navy Federal credit unions, which put up $19 million of the $25 million cost of construction.
Another equity partner is Creek Indian Enterprises Development Authority, the investment arm of the Poarch Creek Band of Indians, which operates Wind Creek Casino and Hotel in Atmore, Ala. All three have a stake in two other MacQueen projects: the Hyatt under construction at Pensacola International Airport and the Holiday Inn Resort on Pensacola Beach.
The deal was so complex, and involved so many different parties with different interests, that many thought it would never happen. “This project demonstrates how the military, business and the community can partner and get things done,” said Col. Anthony Higdon, commander, 96th Engineer Group, Eglin AFB. “This project will shape the way EULs (Enhanced Use Lease) are done across the country.”
In addition to his partnership with the Air Force, MacQueen also worked closely with officials from Okaloosa County and the City of Fort Walton Beach.
Over the 18-month construction period, contractors will employ about 500 tradesmen, and when it opens in 2014 the hotel will employ 120 during peak season. It’s predicted the hotel will have a $40 million annual economic impact on the region.
The Holiday Inn Resort, Destin West is not the first hotel to be built under the DOD’s Enhanced Use Lease program. But what makes it unique is the lease itself.
Under the contract terms, the Air Force is allowed to operate a radio receiver, camera equipment and other test equipment located on the roof of the hotel. The equipment is necessary to monitor aircraft operations in the Gulf of Mexico.
Air Force personnel will man the roof-top facilities, which will be out of sight of hotel guests.
The Holiday Inn Resort, Destin West is a great example of what can happen when creative cooperation occurs among public, private and military sectors focusing on the same thing.
These days, it’s all about jobs.