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Mayor gives timeline and financial update on Nassau Bay Margaritaville (Compass by Margaritaville) project
Summary
Mayor provided a detailed update on the Nassau Bay Margaritaville (Compass by Margaritaville) hotel renovation: the project is 3–4 months behind schedule, expected hotel closure July 1 for a roughly 12-month renovation, with staff citing roughly $2 million in on-hand cash and projections of a $5 million repayment plus an additional $5.7 million from monetization to the city.
The mayor provided a council and public update on the Margaritaville (Compass by Margaritaville) redevelopment project, outlining schedule, funding and oversight by the city.
City officials said the project is roughly three to four months behind the original schedule because the hotel scope expanded (additional restaurants and a separate building), requiring additional engineering and architectural drawings for contractor bidding and bank review. The mayor said the developer agreed to keep the hotel open through an April 18 event and that an announcement about the renovation schedule was expected on or about May 1, with a planned hotel closure around July 1 to begin renovations.
The mayor said the hotel operator has "almost $2,000,000 in free cash" available for the next project stage and that projections provided by the CEO anticipate repayment of $5,000,000 to the city (hotel/motel tax funds) plus a projected additional $5,700,000 to the city upon monetization of the hotel — figures presented as the developer's projections, not council-adopted guarantees. Council noted the city is the largest investor in the general partner and retains approval rights over future steps.
A resident asked whether the Galveston Margaritaville project reported in the press is related; officials clarified the Nassau Bay ownership, branding and investor group are distinct from projects in Galveston. Staff estimated renovation work would take about 12 months, with an allowance that schedules often run late and the full reopening could be later in 2027.
