Tan-Tar-A dives into $10M renovation

When Tan-Tar-A Resort announced in July it would change from the lodge-style setting convention goers and vacationers have enjoyed since 1960 to singer-songwriter Jimmy Buffett’s brand of Margaritaville resorts, there were generally two camps of people reacting on social media.

Some predicted the Osage Beach resort would be swamped with Buffett-fans, aka “parrot heads,” and would become a drunken party destination. Others were pleased to see the long list of renovations and millions of dollars that would be spent at what they considered an aging complex in need of upkeep.

“Everybody’s a little confused until you explain how it’s going to work,” said Tan-Tar-A Sales Director Ann Walters, noting it took many meetings, phone calls and visits with convention representatives and event planners to clear up what management considered misconceptions about the planned transformation.

Tan-Tar-A General Manager Fred Dehner even led his team to attend a Jimmy Buffett concert to learn more about the parrot-head culture and found most of the attendees were over 55 years old and mellow.

“The concern of what people think a Margaritaville will bring is not what you would think – not at all the college kids or the young adults coming down just to have a good time,” said Dehner.

Margaritaville Holdings LLC operates dozens of restaurants, two casinos and nine resorts, according to its website, mostly throughout the coastal United States. Based on Margaritaville promotions, “casual luxe” is coming to Lake of the Ozarks.

New state of mind
Florida-based Driftwood Acquisitions & Development LP bought Tan-Tar-A in June for $30 million and chose to license the Margaritaville brand as part of a $10 million overhaul of the complex, said Peter Majeski, Driftwood’s investor relations director. Its sister-company, Driftwood Hospitality Management LLC, was hired to run the complex in 2012, after the previous owner defaulted on a loan. The resort features 500 guest rooms, 91,000 square feet of event space, as well as a marina, waterpark, golf course, bowling alley, arcade and horseback riding.

The look of the resort will change significantly, Majeski said, with an exterior facelift, renovations to all interior guest spaces, and updates to roads and landscaping.

“It’s going to be done in stages,” he said, noting the work would be performed in the winter off-seasons.

Completion is set for spring 2019, with the renaming of the property to “Tan-Tar-A, a Margaritaville Resort.”

Remodeling already is underway at the woodsy Black Bear Lodge Restaurant, Dehner said, in anticipation of reopening March 1 as nautical-styled JB’s Boathouse. Mr. D’s lobby bar is gaining a kitchen to expand menu choices, and Windrose Restaurant on the Water, the fine-dining option, will be updated – both may receive new names. Near the waterfront, a LandShark Bar & Grill will be added to serve resort guests and passing boaters.

The resort’s current neutral, earthy tones already are being replaced with white and bright ocean-inspired colors, according to plans Driftwood shared with Springfield Business Journal.

To keep the Margaritaville theme, a Buffett song lyric, such as “changes in latitude, changes in attitude” will be above each headboard in the rooms.

Maintaining course
The details are still being ironed out, and resort management is working to calm the storm following the announcement.

“That’s great with a new name change for fun and leisure, but how about going to business meetings/conferences?” said Betty Lytell Rupard, a Columbia resident, on a Facebook post. “Not sure how people are going to like to advertise having their BUSINESS conventions at Margaritaville!!”

But Walters said the undisclosed convention revenues have not dipped and none of her regular customers have decided to move to another venue.

Driftwood and Tan-Tar-A management estimate the number of rooms rented annually to groups is between 60 and 75 percent of total sales.

Walters said some of the corporate event attendees might not even notice the updates, which will not be applied to the convention space.

“We have groups that come into the hotel and don’t really realize that there’s an outdoor pool, because they don’t have time to utilize the pool,” she said.

Vu Nguyen, executive director of Porsche Club of America, said he hired meeting management firm Conference Direct to scout out and bid locations for the organization’s annual Porsche parade, which will be held at Tan-Tar-A in July 2018, long before the changes are finalized.

“We don’t expect it to affect us in anyway, not that we have anything against the Margaritaville branding,” he said, noting the demographic of his club, people over the age of 55 with disposable income, matches the Margaritaville market.

John Farrell, an Osage Beach-based real estate broker and co-founder of the Genuine Country Music Association, said the publicity surrounding the name change and the money being spent on renovations will help the area real estate market and organizations like GCMA, which holds events at the resort.

“That property has always had a big impact on Lake of the Ozarks, and I think with this new owner renovation and the new flag of Margaritaville it’s going to be very exciting,” he said, adding that he was not at all concerned with the alcohol-themed concept affecting the resort’s image. “I’m very familiar with the management that’s in place now, and I expect that they will run a first-class organization.”

The best type of location for business conventions was also debated on a Facebook post about the planned changes.

“I wonder if schools will be sending their teachers there for professional development conferences now that it has the name Margaritaville?” teacher Gordon Hasty asked.

Officials with other professional organizations that regularly meet at Tan-Tar-A – the Missouri Association for Court Administration, Missouri Association of School Administrators and Missouri Public Utility Alliance – say they have not heard any feedback from their members about the changes and would wait to see the new developments before altering their conference plans.

Dehner said the main concern of most event planners was settled when they learned the staff they had coordinated with for many years would not change.

Profit potential
Driftwood officials anticipate a quick return on investment.

While they’re spending over $40 million on the purchase and redevelopment plans, Majeski said the Tan-Tar-A property a decade ago appraised for $67 million, more than double what Driftwood paid.

In accordance with its business model, the company is seeking to sell most of the resort’s equity to investors. Driftwood purchases at least five hotels each year with its own funds, then manages and renovates them before selling up to 90 percent of the equity online.

A large portion of Tan-Tar-A’s shares has been purchased by Chilean Group and an undisclosed Miami-based group. The remaining third is being sold, with a $100,000 minimum buy-in, and 84 percent already has been claimed, according to Driftwood’s website. It advertises a projected rate of return of 19 percent.

Driftwood’s $1 billion-asset portfolio includes 45 hotels in the United States, and the company has 4,500 employees.