Allegiant Travel Company’s planned Sunseeker Resort along Charlotte Harbor has changed gears a bit.
On Thursday, a spokesperson for Allegiant confirmed there will be no condos tied to the large project, and more than 50 deposits placed for condos were refunded.
Meanwhile, the hotel side of the project continues to move forward. It now includes a longer-term stay suites element. Vertical construction of resort towers is expected to begin in the March-April time frame.
Allegiant Travel Company reported its financial results for the fourth quarter and full year for 2018 Wednesday via conference call.
During that call with investors, there was some discussion of the $470 million Sunseeker Resort, which is also expected to bring a 1,000-foot-long pool, restaurants, bars, a public harborwalk and more.
The change involving condos was not discussed on the recorded call, but some of the company’s non-airline ventures were brought up, including golf course management software, and family entertainment centers.
Allegiant recently acquired a golf course in Lake Suzy, Kingsway Country Club, which would offer golf amenities to Sunseeker guests.
Here are more highlights of Wednesday’s investor call:
Sunseeker will begin building by April
Vertical construction is expected to start between March and April, said Greg Anderson, Allegiant’s senior vice president, treasury and principal accounting officer. “We would be opening in the neighborhood about 18 months from then,” or by Fall of 2020.
Sunseeker Resort is projected to include 500 hotel rooms, 189 long-term stay suites as well as meeting space, restaurants, bars and other amenities along the harborwalk, said Allegiant spokesperson Hilarie Grey.
These long-term stay suites could accommodate those “with plans for more extended stays in the area,” Grey said. “Sunseeker will have options for the gamut of time frames visitors choose to stay.”
Allegiant President John Redmond told investors in September that 56 individuals had signed a contract for a condo in Sunseeker.
“Those who placed deposits were contacted and afforded refunds,” Grey told the Sun Thursday.
During the call, Anderson said: “If you drove by the site, you’d see a lot of work going on.”
The 22-acre site has been largely leveled out in preparation for building.
The county has approved plans for road, water and sewer lines, environmental mitigation, storm water systems, a retaining wall and landscaping, the Sun reported last week. The company must now submit a site plan.
Allegiant Travel Company has spent $51 million so far on Sunseeker including property acquisition, and expects to spend $250 to $300 million in 2019. The company also expects $175 million of the estimated $420 million cost of construction to be provided by a “well-known institutional asset manager.” The company declined to name the asset manager.
Allegiant plans to close financing by the end of the first quarter for 2019.
Other non-airline ventures
“When you look at Kingsway, that course is basically break even,” Redmond told an analyst during the call.
Along with purchasing Kingsway Country Club, Allegiant Travel Company also has a side project: Teesnap, a golf course management solution designed to make scheduling tee times online easier. So far, Teesnap manages over 590 golf courses and plans to manage over 800 golf courses in 2019.
Allegiant Travel Company also has created G4 Complete Entertainment, which are family entertainment centers. Including virtual reality games, escape rooms, bowling, go-karts, games and a restaurant.
There is currently a location in Clearfield, Utah. The company also plans to open a location in Warren, Mich., in April. Locations in Fort Wayne, Ind., and West Joran, Utah, are “coming soon,” the website states.
“Why are you spending any capital and company focus on golf course software and Dave & Buster’s-like game rooms,” said Duane Pfennigwerth, an analyst for Evercore ISI. “I understand these things might be interesting experiments, but why do they need to be funded on balance sheet by Allegiant equity holders?... There is no synergy between golf course management software and Allegiant Travel.”
“The person sits on an airplane, what else do they do besides sit on an airplane?” asked Maury Gallagher, the chairman and chief executive officer. “Do they go to a Dave & Buster’s? Yes. Do they play golf? Absolutely.”
“Yes, you can make an argument that maybe the maximum (return on investment) for the next 24 months is putting it into an airplane, but what about out four years from now, five years from now?” Gallagher continued. “Just like every other investment, the early days we’re never going to have a better (return on investment) than a mature business will.”
When asked by Savanthi Syth, an analyst for Raymond James, how big these businesses can be relative to the airline, Redmond replied:
“It’s all a guessing game at this stage, as to how big they can actually get.”
“Our best years are ahead of us,” Redmond said.
The company reported their 64th consecutive profitable quarter, along with transitioning from MD-80 aircraft to an all-Airbus fleet a year ahead of schedule.
“(I’m) very pleased with the health of the organization, the health of the franchise,” said Scott Sheldon, the chief financial officer and chief operating officer.
The airline currently has 431 routes and has identified an additional 600 routes for possible growth.
The company expects to add 17 more Airbus aircraft by the end of this year.