GlobeSt.com UPDATE: Opryland Hotel, Convention Center Win $210 Mil Funding Package

ORLANDO-Gaylord Entertainment Corp. of Nashville, TN received good news today with a loan of up to $210 million to finish construction of a total 1,760 rooms and a 178,000-sf convention center one mile from the main gate of Walt Disney World. The project is on track to open in February.

At an estimated total hard construction cost of $376 million, Gaylord’s venture is the most ambitious hospitality project undertaken in metro Orlando in the past five years, local lodging industry sources tell GlobeSt.com.

A New York lender consortium headed by Deutsche Banc Alex. Brown Inc., Salomon Smith Barney and CIBC World Markets is funding the construction. The loan facility matures in October 2004. It is priced at 337.5 basis points over the London Interbank Offered Rate.

Nearing a February completion are the 1,400-room Opryland Hotel in Kissimmee, FL; another 360-room Emerald Tower boutique-styled hotel owned by Opryland; and an adjacent 178,000-sf convention center.

Officials at Gaylord and Opryland Hospitality Group couldn’t be reached by GlobeSt.com at publication deadline to learn the estimated value of the company’s total developments in metro Orlando.

But area construction industry estimators tell GlobeSt.com that both the 1,400-room hotel and the 360-room hotel are being built at an estimated cost of $200,000 per room. The convention center is going up an estimated $130 per sf.

Those estimated numbers would place the hard construction cost of the 1,400-room hotel at $280 million; the 360-room hotel at $72 million; and the convention center at $24 million.

“This transaction provides us with the liquidity sufficient to complete our Florida property and to operate through the challenging environment that has resulted from the tragic events of Sept. 11,” Gaylord CEO Colin V. Reed says in a prepared statement.

“Securing this level of commitment in the current environment is a strong endorsement of our Florida property; our position in the meeting and convention center business; and the prospects of the new Gaylord Entertainment Co.”

Reed says the Orlando Opryland Hotel has booked an occupancy rate of about 55% for 2002. The hotel has booked 870,000 room nights through 2011. At a daily room rate range of $250 to $450, the estimated value of those bookings could be $30 million, area lodging industry brokers tell GlobeSt.com.

Reed says in the statement the hotel “has not received any cancellations for 2002 and we have continued to book additional business.” He says Gaylord is impressed with the positive response from meeting planners, travel agents and associations.

“The pre-booking levels for this property are very compelling,” Reed says.

Gaylord operates in two groups–hospitality and attractions; and music, media and entertainment. Among the businesses are Opryland Hotels, the Grand Ole Opry, Acuff-Rose Music Publishing, Word Entertainment and WSM Radio.

Gaylord’s common was trading at noon on the New York Stock Exchange at $19.06, down 67 cents (3.17%) from $19.67 on Oct. 4. Volume was 7,000. The 52-week high-low is $29.15 and $19.06. There are 34 million shares outstanding. The company’s market capitalization is $639 million.