Despite recession, construction on the rise in Gatlinburg

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More than 150-million dollars worth of construction is now underway in Gatlinburg with planned new hotels and restaurants.

But with a country in a recession, why build?

Unlike tough times in the late 1970's when interest rates were double-digit, rates now are very good.

Not only that, but construction material prices are down.

So some see this as a wonderful time to build.

The Hilton hotel chain is building a new ten million dollar hotel in downtown Gatlinburg. Not just a hotel, but a green hotel.

"Lead certification is all about the environment on trying to recycle materials on the construction site," says Hilton Garden Inn General Manager Kris Reagan.

But most times, going green requires more green from the wallet. So why now in a recession?

Reagan says that's the reason.

"A lot of furniture and the FF&E that we're doing, a lot of the people and the vendors are much more approachable on negotiations," says Reagan.

At the town's entrance off the spur a much more grander project.

Demolition has begun on a more than 200-million dollar complex.

Architect renderings show five restaurants, a parking deck, and not one but two hotels.

"And right along the waterfront here there's going to be 350 hotel rooms," says Peter Medlyn with the Gateway Gatlinburg Ltd. Partnership

Medlyn says they're already saving money on the project.

He says they acquired the eight acres of land in January and are now in the demolition stage.

Medlyn says, "We had people calling us as soon as they found out the job might have been available and we're probably doing it, from what it was, maybe fifty cents on the dollar"

Medlyn says they're already bidding out the materials.

"People are pretty hungry to get work right now. Steel has come down, materials have come down, obviously labor is right down," says Medlyn.

Financing a more than 200-million dollar project isn't easy, but Medlyn says it's bearable.

"Prime is down under four percent so we're borrowing it at probably the lowest rates we've ever seen," says Medlyn.

Now Medlyn says they hope to finish their mega project in the year 2011.

He says the hope is by then they have not only paid less for a project that should have cost more.

But that the recession will be over by the time they open their doors for business.



 
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