First came a global pandemic, rattling the entire hospitality sector.

Then came the slow-churning, powerful Hurricane Sally that wreaked havoc on coastal Alabama.

And then a supply chain crisis led to higher construction costs and inflation.

It’s been a series of setbacks for the Embassy Suites hotel and conference center project in Gulf Shores since 2018, when the city first approved a development agreement for a project that officials once called a “jewel.”

The delays finally are coming to an end.

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The Gulf Shores City Council will vote Monday on a series of street closures to accommodate a 24-to-26-month construction of a new 257-room, eight story hotel and conference center within a 2-acre site located within a prime area along West Beach Boulevard.

“Everyone has remained completely committed to the project,” said Blake Phelps, economic development coordinator with the City of Gulf Shores. “It’s definitely happening.”

Construction is expected to begin after the Memorial Day holiday, at which time some road closures will begin to take place.

Some of the highlights:

• West 1st Street will be elevated to meet the entrance, and the city will close the street to provide a laydown area during construction as well as allowing for a safe corridor to the neighboring site for storing materials.
• Pedestrians will be directed to utilize West 2nd Street of Gulf Shores Parkway when the West 1st Street sidewalk is not available. There will be barriers between the sit and West 1st Avenue for east-west pedestrian traffic on the north side of the site.
• Trucks hauling construction materials will access the construction site from Alabama State Route 59 to the property’s north end via West 1st Avenue. Trucks will then exit through the south end of the property.

“There will be a lot of construction activity on that 2-acre site for the next two years,” said Grant Brown, spokesman with the city of Gulf Shores. “As (the public) parks and finds ways to get to the Public Beach area, (the construction) will be a concern.”

He said the city will recommend beach visitors to park west of the property, where the city has public lots for visitors.

“We’re keeping pedestrian access open through West 1st Street,” Brown said. “Parking is a huge issue down in that area. There are quite a few parking spaces near DeSoto’s (Seafood Kitchen) and East 1st Avenue.”

The disruptions will be worth it, Brown and Phelps said. Demand is coming back for conventions and business conferences, and the Embassy Suite’s location – right across from Alabama’s most visible beach – makes it a prime spot.

“There are people reaching out right now,” Phelps said. “I got an email from a group earlier on Monday, and they were looking to bring in five to six conferences every year to that facility.”

He said he was putting the conference group in touch with Atlanta-based Peachtree Hotel Group, one of the partners in the Embassy Suites project.

Aside from Peachtree, the group also includes Dallas-based Woodbine Development and DD Partners of Birmingham, which includes developer Ron Durham.

The partnership is called PHG WB Gulf Shores LLC located out of Atlanta, who will own and operate the new hotel and conference center. The group closed on the land purchase for the Embassy Suites project in November 2022, spending $6 million to purchase the site from the City of Gulf Shores.

Embassy Suites is a chain of hotels trademarked by Hilton Worldwide.

Durham also owns land adjacent to the Embassy Suites project and, according to Phelps, he plans to build complimentary project that could include up to 100 condominium units and retail. That development is expected to go before the Gulf Shores Planning Commission for consideration before the end of the year.

“They don’t want to put a hotel right next to another hotel, but it would be more of a condo project and would stay in line with the more urban, street-level design and take advantage of (Beach Boulevard) and would engage with the pedestrian area,” said Phelps.

The Embassy Suites project’s original development agreement remains intact as it was originally crafted in 2018 and reapproved in early 2022. The biggest change from the 2018 agreement to today is with the project’s soaring costs — it was estimated at around $85 million five years ago. Phelps said the project is now going to cost around $140 million.

The scope hasn’t changed much, he said.

“Our development agreement really kind of forces the project to be what it is,” Phelps said. “There is not a lot of wiggle room there and in what they are able to construct (on the site).”

The agreement continues providing a rarity for Gulf Shores – tax incentives for a hotel development.

According to the agreement with the city, once the project is complete, the partners will receive a tax rebate of approximately 42% on all non-education related tax revenues generated by the project within the first three years of operations.

After that, approximately 35% of tax revenues will be abated until the developers receive a maximum rebate of $6.5 million.

The city’s 3% portion of its overall 10% sales tax rate is subject to the rebate. Also, the 5 mills of property taxes assessed on the property is also included in the abatement.

An additional 3% of the city’s 9% lodging tax will be rebated back to the developer.

The city, in return, will get $1.2 million in cash to construct 150 additional public parking spaces and other travel way improvements within the Gulf Beach District that includes the beach and some of the coastal area’s most popular attractions.

Overnight hotel parking will be on site, but the additional parking spaces will accommodate visitors who are not spending the night, but who are attending a conference.

Beth Gendler, president & CEO with Gulf Shores & Orange Beach Tourism, said the new project will help Gulf Shores better compete for more conventions and business group meetings that go elsewhere due to a “lack of space and availability” along the Alabama Gulf Coast.

The closest venue that is similar to the Embassy Suites is The Lodge at Gulf State Park, also a Hilton product. The 350-room Lodge, also a $140 million project, opened in November 2018. It’s on state beachfront property and was financed largely by the state’s portion of settlement funds from the 2010 Deepwater Horizon disaster and subsequent oil spill that affected coastal Alabama’s beaches.

Gulf Shores city officials have said that The Lodge and Embassy Suites will complement each other.

Gendler said that bringing in meetings and conventions was “vitally important to bringing year-round customers to our local tourism business, which in turn means year-round employment for our hospitality workers.”

She said, “Embassy Suites is a well-known and respected brand and we know our guests will appreciate having in the heart of the Gulf Shores public beach area.”