House committee passes bill to increase Savannah Convention Center bonding capacity

A piece of legislation to increase the Savannah-Georgia Convention Center Authority's bonding capacity made it through a state House committee Tuesday, completing an initial step towards an update in state law needed for the authority's plans to build a hotel next to the Savannah Convention Center.

The increased capacity will help cover financing of the adjacent hotel, which is expected to cost near $300 million, said SGCCA Chairman Mark V. Smith. The bill, HB1041, would increase the authority's bonding capacity to $400 million. That's up from its existing capacity of $50 million.

"It was an important first step, and I was so pleased to see a unanimous vote in support of our legislation," Smith said.

More: State to build hotel next to Savannah Convention Center

More: Savannah Convention Center completion pushed out (again) to May 2024

Selling bonds to the private sector is a common way of funding large-scale projects. Setting the capacity at $400 million gives the authority cushion in case project costs exceed current estimates, Smith said.

The SGCCA moved forward with its plans for a hotel in October to eventually meet demand from the SCC's expansion, which has received a $276 million investment from the state for the project. The expansion is set to double the SCC's size.

Smith said about three dozen potential clients have held out on booking with the Convention Center until the hotel is built. The groups are looking for about 800 rooms on Hutchinson Island, and a new hotel would provide another 400 to the existing 403-room Westin Savannah Harbor.

"It's for that reason, to maximize the potential of the convention center, that we are endeavoring to build a hotel there," Smith said.

The update would put the SGCCA in line with the model used by the Georgia World Congress Center Authority to build its recently opened Signia Hotel next to Mercedes-Benz Stadium. The GWCCA moved forward with its own hotel after having issues landing private developers, and the SCC has found itself in a similar position, Smith said.

A previous private developer, Brookfield Properties, backed out of a development agreement in June 2023 due to financing issues, according to reporting by The Atlanta Journal-Constitution.

"The Savannah-Georgia Convention Center has come to the conclusion, after numerous private developers have pulled out, that we would like to move ahead and follow the same model as the Georgia World Congress Center," Smith said in Tuesday's hearing.

The bill also gives the SGCCA the authority to condemn public property, which is a power other state-made authorities, such as the GWCCA and the Stone Mountain Memorial Association Authority, possess.

"We believe we need that, just because we have a very complicated set of real estate dynamics on the site," Smith said.

Rep. Ron Stephens (R-164) said in a text message that the increased bond capacity will allow the SGCCA to cover its own costs on the site. Smith said there are various capital projects on SCC's campus they hope to address, including updates to Hutchinson Island's riverwalk.

More: Savannah Convention Center asking for $15 million from state for riverwalk updates

The next step for the hotel project is to enter a development agreement with Atlanta-based developer Songy Highroads. The SGCCA recently approved a Letter of Intent for a development agreement with the group.

The bill will now move to the House Rules Committee before a vote in the full chamber. It will also need to pass the state Senate, before going to Governor Brian Kemp to be signed as law.

We are thankful to our legislative delegation for supporting this request, and their continued support in ensuring we have a successful project that benefits our region and the state as well," said SGCCA Treasurer Bert Brantley in a statement to the Savannah Morning News.

Evan Lasseter is the city and county government reporter for the Savannah Morning News. You can reach him at ELasseter@gannett.com.

This article originally appeared on Savannah Morning News: Legislation for Savannah Convention Center hotel passes House committee