County considering scaled-down Gateway hotel

By Billy Corriher

After the Clayton County Board of Commissioners raised concerns about investing in Gateway Village's planned Hilton Hotel and Convention Center, the project's developers came to the commissioners Tuesday with a proposal for a smaller version of the center.

Originally, the hotel in Morrow was supposed to have 250 rooms, but if there were not a 65 percent occupancy, the county would have to make up for the revenue shortfall. Now Gateway's planners are proposing a scaled-down convention center and a 150-room hotel, making it easier to meet the 65 percent occupancy threshold.

The smaller center also means the county would only have to contribute $18 million for its construction, instead of $25 million. The county would issue bonds to pay for its share, and then the center's revenue would be used to pay the bonds back.

Crandle Bray, chairman of the board of commissioners, said he was nervous about the risk associated with the larger hotel, but feels comfortable with the scaled down version that leaves room for expansion.

"We have to move forward on this," Bray said, adding that the board could vote on the center on Tuesday. "The success of this project depends on this hotel being added to it."

Commissioner Charley Griswell said he wanted more information on the project before he made a decision.

"If you want me to vote, you're going to have to give me some information on what to vote on," he said.

Griswell requested more information on how the county could make sure the center is a wise investment and the taxpayers don't have to pay to keep it open.

Clark Stevens, Bray's administrative assistant, said that under the new proposal, even a low 50-percent occupancy would only mean the county has to chip in $250,000 a year.

"This project is a whole lot easier on us than the larger one," he said. "It seems to me that your downside is pretty cheap."

Roland Downing, chairman of the county development authority, said the hotel would maintain a high occupancy rate, and he pointed out the benefits the county would see from the center, including 370 new jobs.

Downing said the center would also help the county keep revenue from visitors who come for conventions or for research at the federal and state archives near the center.

Commissioner Carl Rhodenizer said he supported the project, stressing the new jobs and visitors to the archives, and he thought the smaller hotel was a good compromise.

Rhodenizer said he thought the commissioners, once they had a look at the planners' financial projections, would also support the center.

"The longer we wait, the more we send a message? that we're dragging our feet," Rhodenizer said.

The commissioners also heard from Katherine Dodson, the county's risk manager, about the deficit in the county's medical self-insurance fund. Dodson said the deficit means employees' PPO premiums could increase by 35 percent and HMO premiums could go up by 12 percent.

The deficit occurred when county employees were given the option to enroll in one of two plans, a self-funded PPO plan and an HMO plan, she said. Most older county employees chose the PPO plan, while the younger employees tended to enroll in the HMO plan.

This led to a "skewing of the risk," Dodson said, adding that many of the claims came from the older employees in the PPO plan. Dodson is now recommending that the county solicit bids for a provider that offers both a PPO and HMO plan, so it could pool the risk.

The insurance fund's deficit for the last fiscal year was more than $1.6 million, much of which could be covered with a surplus in the worker's compensation insurance fund. But Dodson said this year's deficit could still reach $800,000, and the rising costs of health care show no signs of slowing down.

"It is getting to the point where you have to be wealthy to afford health care," she said. "Something has to give."