Gaylord Entertainment (NYSE: GET) today announced the termination of its plans to develop a resort and convention hotel in Chula Vista, California. Prolonged planning and approval processes, a complicated regulatory and legal structure, and excessive off-site infrastructure costs contributed to this decision.
'We are very disappointed to have made this decision since the greater San Diego region is such an important convention market,' said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. 'However, over the last year to 18 months, this project has become much more complicated and risky as infrastructure costs escalated and the time line for the hotel was extended by the very complicated and prolonged approval process. While many will likely attribute this announcement to the rapidly deteriorating economy, the fact is that the complexity and costs of the project were the main drivers of this decision.'
'Through this process, we have come to know and respect the leadership of Chula Vista and the Port and thank them for their efforts and support,' said Reed.
The decision regarding the Chula Vista project today has no bearing on Gaylord's other announced development initiatives. Gaylord will be taking a non-cash impairment charge of approximately $5 million in the fourth quarter for costs incurred to-date on the Chula Vista project.
