Mike Klein Online

Toombs Judge Stops $17 Million Washington, Georgia Hotel Project

Toombs Judicial Circuit Judge Harold A. Hinesley ruled Wednesday that Washington, Georgia cannot go forward with an $8.1 million municipal revenue bond sale to finance a city-owned hotel that would be constructed near its under-performing Pope Center.  Hinesley said the city “abused its discretion in relying on an obviously flawed feasibility study.”

The ruling is a victory for citizens who want to stop the project.  Attorneys for Concerned People of Washington argued that the city did not demonstrate that revenue would be sufficient to pay off more than $17 million in principal and interest payments over 30 years.  Hinesley agreed.

Attorney William deGolian represents the citizens.   He said the Hinesley ruling is “obviously appeal-able (but) I think it’s a very, very strong order that I think they will have a hard time getting a reversal.  I’m not going to say the project is dead but it’s been dealt a very strong blow.”  The city could appeal to the state Supreme Court or the state Court of Appeals.

Washington proposed to build a multi-million dollar hotel that would operate in competition to an existing small stock of hotel, historic inn and bed-and-breakfast businesses. City officials see the project as a catalyst that will cause other spending to happen in and around the community. Consultants hired by the city predicted the new hotel would achieve a 60% occupancy rate.

Judge Hinesley strongly disagreed.  His ruling said “glaring deficiencies” in the city’s proposed model resulted in “defective and unreliable” conclusions about “the feasibility of the project.”

Hinesley criticized the city for not considering occupancy rates for existing hotels, not taking into account that the existing Fitzpatrick Hotel is open just two days per week and not providing data about conventions or meetings that would be attracted to Washington. City consultants used data from hotels that are not located in or near Washington to justify need for the new hotel.

Hinesley’s ruling said, “…there was no data to confirm the conclusion that the Washington area was growing and the evidence indicated otherwise.  These glaring deficiencies make defective and unreliable the 60 percent occupancy rate used to determine the feasibility of the project.”

Mike Klein is Editor at the Georgia Public Policy Foundation.

October 27, 2010 - Posted by mikekleinonline | Uncategorized