Resort, conference developments could boost tourism

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This article has been updated to reflect Margaritaville is in Conroe’s city limits.

Visitors to Conroe could soon have new options for lodging as officials say two major developments are expected to boost tourism in the Lake Conroe and Montgomery areas.

Margaritaville Resort announced April 4 its acquisition of the 186-acre La Torretta Lake Resort & Spa property on Lake Conroe in partnership with Atlanta-based Songy Highroads and Baton Rouge, Lousiana-based The Wampold Companies. This comes while the city of Conroe is in the early design phase with Dallas-based development firm Garfield Public/Private on planning an $85.2 million hotel and convention center at Grand Central Park.

“The Margaritaville lifestyle brand is one of the hottest in the country, and Texas is a prime market for it,” said Todd Nocerini, CEO of Songy Highroads, in a statement. “The fact that the lakefront resort is an easy drive for residents of the state’s four largest markets only adds to the excitement and potential pool of guests.”

Meanwhile, Conroe officials said convention center plans are stalled out on funding mechanisms, waiting on the state Legislature’s votes on hotel occupancy tax bills relating to municipalities’ authority to collect hotel taxes.

Hotel taxes—paid by visitors who rent hotel rooms—currently fund Visit Conroe’s services, which include helping businesses plan events and attracting people and businesses to town.

Conroe expects to collect $1.49 million in hotel taxes—used to promote the tourism and convention industry—in fiscal year 2018-19, a 151.3% increase over the $592,046 collected in FY 2010-11, according to past city of Conroe operating budgets.

Visit Conroe Director Shannon Overby said the two planned hospitality projects could drive additional business to the Conroe area, which is already attractive to developers with its proximity to Houston, the lake and the forest.

“Think about the new developments and new businesses that could come in because of the increase in number of visitors [to Margaritaville]—I just think it’s going to be tremendous. It’s going to be a game changer for Conroe for sure,” Overby said. “At the same time, the city has been working on a convention center and hotel project, so we’ll have two new projects in about the same window of opening, so we’ll definitely be bringing in more visitors.”

Tourism transformation

On the lake, the 445-room La Torretta Lake Resort & Spa will be transformed into Jimmy Buffet’s Margaritaville by adding guest rooms to its main 20-story hotel and lakefront villas to the property and converting the two existing restaurants into Margaritaville brands LandShark Bar & Grill and 5 o’Clock Somewhere Bar & Grill.

Renovating the 18-hole golf course, tennis facilities, spa, outdoor pool, and a total of 45,000 square feet of indoor and outdoor meeting space are also in the plans. The Margaritaville Lake Resort is slated to debut in the third quarter of 2020, according to a press release.

“We don’t get the [tax dollar]benefit for the city from [Margaritaville] because it’s actually in Conroe,” Montgomery Mayor Sara Countryman said. “But having a Montgomery address is going to bring a lot of folks to our town, and we’re going to put our history and charm on center stage.”

Meanwhile, plans for the Conroe Convention Center include 252 guest rooms in a seven-story hotel and 31,000 square feet of ballroom and meeting space, according to its business plan compiled by Garfield Public/Private, with which the Conroe Industrial Development Corp. entered into a predevelopment agreement in July 2017.

A 370-car parking garage, lounge, bar, restaurant and pool are also in the plans, along with a 150-car surface lot, according to Garfield Public/Private.

The city of Conroe would own the property and lease it to a hotel operator. It would be funded through bonds to be paid back through city and CIDC sales taxes generated from the project and through hotel tax money. After a 30-year agreement with the hotel operator, the city can sell the whole development.

“I’ve been really watching this thing to make sure it’s funded properly,” said Duke Coon, Conroe City Council member and mayor pro tem. “Once it’s built it will have a tremendous economic impact for us. We’ve got to get those funding mechanisms properly in line so it doesn’t end up being a tax burden.”

Steve Williams, Conroe assistant city administrator and chief financial officer, said $71.9 million will be spent on construction and $14.3 million on soft costs including design, but the most pressing issue is legislation moving through the state House.

“[The bills would] allow us to participate in a rebate program of the state’s portion of the hotel occupancy tax, and … recapture that from the project for 10 years,” Williams said.

Next, Williams said the city is negotiating with Hilton, Hyatt and Marriott, and after that the design phase will last about six months before selecting a contractor and breaking ground.

Back in January, Williams estimated the convention center could become a nearly $100 million asset to the city. Its tentative opening date is April 25, 2021.

Employment effects

Before the Margaritaville transformation can take place, La Torretta will close for yearlong renovations resulting in 241 layoffs, according to the Texas Workforce Commission. However, La Torretta organized a job fair for its employees, and La Torretta spokesperson Michelle Kelly said the resort is also offering employee seminars for job-hunting.

“La Torretta has organized a number of employment seminars and events as our affected associates remain a top priority, including the [April 24] job fair. Primarily a word of mouth initiative, more than 30 local businesses and industry partners will be in attendance to support our efforts,” La Torretta officials said in a statement April 22.

When Shannan Reid, director of the Montgomery Area Chamber of Commerce, heard the news about the job fair, she helped recruit restaurants, insurance companies and payroll services along with hospitalities interested in picking up La Torretta employees.

“With our increase in population … keeping up with our low unemployment, we’re definitely going to have people, bodies to fill [jobs],” Reid said.

Overby said after Margaritaville opens back up, she expects the tourism and jobs to come back.

“Unfortunately, we just don’t have another hotel for them to go to of that magnitude, so it is a little bit difficult, but we’re doing everything we can,” Overby said. “It’s never a good time to lose your job. It’s a difficult situation.”

In 2016, 21,361 Montgomery County residents were employed in the accommodations and food services sector in 929 establishments, according to the U.S. Census Bureau—a 33.5% increase in industry employment since 2010 and 28.5% increase in established hospitality employers.

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Jules Rogers
Originally from the Pacific Northwest, Jules Rogers has been covering community journalism and urban trade news since 2014. She moved to Houston in June 2018 to become an editor with Community Impact Newspaper after four years of reporting for various newspapers affiliated with the Portland Tribune in Oregon, including two years at the Portland Business Tribune. Before that, Jules spent time reporting for the Grants Pass Daily Courier in Southern Oregon. Her favorite beats to cover are business, economic development and urban planning.
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