Innisfree’s Newest Beachfront Hotel Celebrates Strong Ties to Military Community

Located at 1299 Miracle Strip Parkway SE, the Holiday Inn Resort, Fort Walton Beach, FL is the best new family resort on the Gulf Coast. It offers beachfront event space and the finest pool in the area and is located just minutes from local restaurants, attractions and upscale shopping.

“We are thrilled to be opening this hotel after six years of working on the project,” said Rich Chism, Director of Development for Innisfree Hotels. “The best part of my job is watching children’s faces light up when they enter the lobby and realize this is their hotel. We strive to deliver a ‘wow’ factor and help families create memories together.”

Indeed, creating memories is the Innisfree mission, and this new resort – the only one of its kind between Pensacola and Panama City – will be no exception. Between the pool’s lazy river, hot tub and waterfall; family suites with private balconies overlooking the ocean; supervised children’s activities including interactive mermaid and pirate shows; 24-hour fitness and business centers; and 2,500 sq. ft. of special event space, and many other resort amenities provide ample opportunities for memories in the making.

The 17-acre tract of land the hotel was built on was previously home to a 1,200 sq. ft. cinder block building equipped with a receiver for tracking Air Force maneuvers along the coast.

Julian MacQueen, Innisfree’s Founder and CEO says, “By far the biggest challenge in developing this site was negotiating the Enhanced Use Lease (EUL) with the United States Air Force. Because it marks the first public-private lease of Air Force land, the process extended over four years. The concept was born of the idea that the Air Force could generate revenue on underutilized land that maintained a strategic purpose for our military.”

Innisfree negotiated an innovative design, which would allow the receiver to remain in use from a new perch atop the resort. So when you visit the Holiday Inn Resort and you spy a giant, whimsical beach ball on the roof, you are actually looking at the Air Force receiver. Negotiations require the hotel to give a 50 percent discount off the per diem rate for military personnel. Therefore, Innisfree has set aside 4,000 room nights each year for military servicemen and women to enjoy a first-class resort experience that may otherwise be out of reach.

In addition to this benefit, the resort will pay a percentage of all revenue to the Air Force designated exclusively to capital improvements to boost morale and welfare on Eglin Air Force Base. In advance of the percentage rent, Innisfree Hotels already has made a $1 million initial payment to the Air Force, which will be used to improve Eglin’s living quarters and recreational facilities.  MacQueen says, “This has been one of the more gratifying aspects of this development.”

The new Holiday Inn Resort was developed by Innisfree Hotels with General Contractor dck north america, with dramatic architectural design by Larry Adams of Bullock Tice Associates in Pensacola, FL Debbie Adrian of ACC Design in Memphis, TN created the bold and colorful interiors, while Chad Watkins of WAS Design in Foley, AL was the mastermind of the lazy river and pool deck.

Innisfree is grateful for a capital investment from the Poarch Band of Creek Indians, building upon a longstanding partnership and joint commitment to the community. Financing was provided by Navy Federal Credit Union and Pen Air Federal Credit Union who both enjoy strong ties to the military members they serve.

The beachfront resort is centrally located to popular restaurants, shops and attractions including the Gulfarium Marine Adventure Park, Big Kahuna’s Water Park and Destin Commons, yet its close proximity to Eglin Air Force Base and Hurlburt Field and is likewise significant. The project was made possible via the United States Air Forces Enhanced Use Lease (EUL) program, under which Emerald Breeze Resort Group (EBRG) leases the 17-acre tract and pays the USAF a percentage of gross sales. These funds, in turn, are allocated to improve the morale and welfare of local airmen.

“I grew up spending my summers in this area and always believed that the USAF had the best piece of property on the Gulf Coast,” says MacQueen. “We were proud to be selected as the company to maximize its potential for the public while honoring those who have served our country.”

An exciting “new generation” hotel, offering round-the-clock amenities and modern design.

Innisfree Hotels and its partners were excited to celebrate the opening of the Hyatt Place Hotel at the Pensacola International Airport with an official opening launch party and celebration on April 24, 2013.

“We’re proud to introduce the Hyatt Place Hotel brand to the Pensacola area market,” notes Rich Chism, Director of Development for Innisfree Hotels. “We believe travelers will appreciate the comfortable and functional amenities offered at Hyatt Place Pensacola Airport such as free Wi-Fi, made-to-order fresh food around the clock and the StayFit@Hyatt fitness center.”

The hotel brings a new level of amenities to the airport and will generate additional opportunities for Pensacola in the travel industry.

“Having this premier hotel at our international airport is a distinctive advantage for our business and leisure travelers,” says Airport Director Greg Donovan. “Our customers now have the option of staying overnight right on the airport campus with top notch restaurants and retail nearby. Having such amenities is exclusive to Pensacola International, as no other airport in the region has the convenience of an on-site hotel or the high levels of service that Hyatt is known for.”

“I’m excited about the economic impact of this development,” says Pensacola Mayor Ashton Hayward. “The beautiful new Hyatt Place Hotel is a great addition to Pensacola and adds even more value for travelers choosing Pensacola International Airport. I want to thank Innisfree and their partners for working to create new jobs and new revenue for our city.”

Exceptional landscaping and design concepts extend to the exterior of the hotel and adjacent commercial properties. This $24 million project is projected to generate more than $420,000 annually in non-airline revenue for the Airport through lease fees, and $100,000 in local option sales taxes for the City of Pensacola. It will also create more than $4 million in payroll revenues through the addition of new jobs to the local economy.

Innisfree is proud to partner with the Poarch Band of Creek Indians on this project. Julian MacQueen, Innisfree’s CEO and Founder says, “Our relationship with the Poarch Band of Creek Indians has spanned almost two decades. We’ve collaborated on other successful projects during this time and are very excited to work with them again.”

“We are fortunate enough to be able to reinvest into the community with quality investments like this project,” said Tim Martin, President/CEO of Creek Indian Enterprises Development Authority (CIEDA).

Launched in 2006, Hyatt Place brings to the upscale select-service hotel category the authentic hospitality for which Hyatt is known. Inspired by multitasking travelers’ 24/7 lifestyle, Hyatt Place combines stylish design and practical amenities with forward-thinking technology and purposeful service.

Innisfree Hotels’ Founder and CEO Julian MacQueen is happy to be part of a growing group of owners able to refinance their hotels as the lending environment loosens.

Innisfree Hotels Founder and CEO Julian MacQueen is happy to be part of a growing group of owners who have been able to refinance their hotels as the lending environment continues to loosen. Innisfree worked with Aries Capital to refinance two multi-million dollar debts during 2012: a $57-million transaction in March and an $82-million deal in December 2013.

The first deal, a 10-year non-recourse commercial-mortgage-backed-security loan with a 64% loan-to-value ratio, covered the refinancing of a 137-room Hilton Garden Inn and a 119-room Holiday Inn Express, both in Orange Beach, Alabama, and a 181-room Hampton Inn in Pensacola Beach, Florida. The second deal took care of a 206-room Holiday Inn Resort and a 275-room Hilton—both in Pensacola Beach.

The LTV for that deal was 70%; the lenders providing the financings were not disclosed. “We were able to cash out, which was important to us,” MacQueen said. “It was a two-tiered challenge. We had three hotels in Orange Beach Alabama that had more equity in them than the other two. We knew we needed to combine multiple properties in two states, and three of them were land leases.”

A big deal for MacQueen was him getting out from under $38 million of personal recourse. “Not only was I able to get out of most of the personal recourse, we were able to replace the debt service from unamortized to amortized,” MacQueen said. “To go off of recourse, that’s huge. To get a 10-year deal, that’s huge. And we closed it in 30 days.” “It takes a lot of hard work and cooperation to close a deal like this in 30 days,” said Neil Freeman, chairman and CEO of Aries Capital.

MacQueen had simple advice for owners looking to refinance: “Start early. Don’t throw yourself in the eleventh-hour crunch.” The executives declined to reveal terms of the refinancing.

Like many deals in the hotel industry, this one was done thanks to a relationship that began at the Americas Lodging Investment Summit in 2011 during a financing forum. Freeman was impressed with the Innisfree portfolio and was eager to see how it handled the aftermath of the BP Gulf Oil spill. “They weathered the storm and had stable assets,” Freeman said. “We were in Atlanta on business and (Aries senior VP) Jeff (Bucaro) said ‘let’s fly to Pensacola to check them out.’ So that’s what we did.”

Aries Capital generated more than $250 million in capital volume in 2012 and is looking at new construction and major rehab loans in 2013. It can handle any place in the capital stack for such projects, Freeman said, adding that he expects CMBS funding will be at historical averages in 2013.

Innisfree, which was founded in 1990 and has 1,000 employees, has approximately 2,000 rooms in its portfolio that generate about $57 million in annual revenue, MacQueen said. “We are looking for future growth and more opportunities in high-demand seasonal locations—any place with a strong tourist component,” MacQueen said.

The company has two properties under construction in partnerships with the Creek Indian Enterprises Development Authority—a $24-million 127-room Hyatt Place hotel at the Pensacola International Airport that is scheduled to open spring 2013 and a $25-million, 152-room Holiday Inn Resort Hotel in Fort Walton Beach, Florida, that will open in spring 2014.

The Fort Walton Beach development will occupy 17 gulf-front acres that is owned by the U.S. Air Force. The two companies are working as a single local entity called the Emerald Breeze Resort Group to build the property as part of the government’s Enhanced Use Lease program, a new concept from the armed services that helps create revenue streams from underutilized facilities. The property was made available for private development because of this program.

The EUL program, which is managed by the Air Force Civil Engineer Center, identifies underutilized military properties with ongoing mission requirements. In this case, the Air Force will maintain passive radio receiver dish, camera equipment and a passive radar facility on the hotel’s roof. “They freed up 17 acres of land and created an income stream for Eglin Air Force Base,” MacQueen said. “You can see a direct impact of our lease dollars going straight to the base.”

Revenue generated from the lease will be contributed to the Eglin Air Force Base budget. It took four years to develop the EUL, MacQueen said. It began with 100 bids, and then Innisfree won the right to conduct exclusive negotiations with the Air Force.

The company practices the triple bottom-line philosophy, which will work well for the Fort Walton Beach hotel, according to MacQueen. “We are focused on people, planet and profits, in that order,” he said. “We are very conscious of our impact on the beach. For example, the type of sand we use must be the same type of sand that’s there before building, and we’ve made sure we weren’t making any kind of impact on the wetlands.” On the people front, the company will offer 50% off the military per diem rate for members of the U.S. armed services. “This will allow servicemen and women to experience a first class beachfront hotel—it’s a wonderful way to give back to people serving every day.”

MacQueen knows there are advantages to winning the contract. Among the more lucrative perks is not having to pay property taxes because it is on government-owned land. He admits he’s gotten some push back from locals because of the property tax situation, but he’s comfortable with providing the discount to servicemen and women as a good alternative to giving government agencies the funds.

In addition, there’s room to build another hotel on the land when the first one reaches stability. That plays well with MacQueen’s bullish outlook for the next four years. “Through 2017 is nothing but blue skies,” he said. “We’re looking through 2017 as having compounded growth of 6% a year.”