SOURCE: Meritage Hospitality Group Inc.

January 09, 2008 10:29 ET

Meritage Hospitality Receives Government Approval on Two Eleuthera Oceanfront Development Sites

GRAND RAPIDS, MI--(Marketwire - January 9, 2008) - Meritage Hospitality Group Inc. (PINKSHEETS: MHGU), one of the nation's premier franchise operators, today announced that its wholly owned subsidiary, Meritage Hospitality Bahamas, Ltd., has received "Investment Approvals in Principal" from the Bahamian government to acquire two oceanfront sites for residential resort development. The locations, commonly referred to as the Rock Sound Bay and Northside Beach properties, are located within and adjacent to the quaint seaside village of Rock Sound, Eleuthera, Bahamas.

Meritage's purchase of both properties is conditioned upon approvals from the Bahamian government and the closing of a larger and separate 884-acre parcel development on South Eleuthera for a large-scale destination resort community. The 884-acre development has also received an "Investment Approval in Principal" from the National Economic Council, and is awaiting the final documentation from the Ministry of Works on various rights, titles and interests necessary to complete the permit documentation.

Meritage's CEO, Robert E. Schermer, Jr., stated, "We are delighted and appreciative of both the Prime Minister and the Government of the Bahamas for their oversight in assisting us in obtaining the necessary approvals. This is the result of a timely and extensive effort to satisfy all of the necessary contractual and governmental requirements. These approvals and entitlements under the Hotel Encouragement Act are an important milestone in meeting our development objectives for South Eleuthera."

Mr. Schermer added, "Today it may be difficult to fully appreciate the intrinsic value in our development approvals and entitlements. We have obtained site plans, environmental assessments, surveys, market feasibility reviews, schematic designs, architectural plans, land planning and title commitments for these developments. Both Rock Sound Bay and Northside Beach are designed to provide affordable resort accommodations, and will also provide, in the near term, affordable accommodations to support the pending development of the 884-acre development."

Mr. Schermer concluded, "I believe Meritage is poised to be a leading catalyst for development on South Eleuthera, working in a collaborative manner towards the economic and socially responsible development of this island community. The Company seeks best-of-class operators that share our vision of low rise, high quality, lifestyle for South Eleuthera. Our investment rationale remains centered on the thesis that South Eleuthera is in its development infancy -- similar to the Hawaiian Islands and Mexico's Baha Peninsula generations ago. We expect the aging baby boomer population will increase American and European travel and leisure expenditures. As travelers and yacht owners explore the Caribbean seeking unique adventures, they will discover South Eleuthera with its new world panache and old world charm. Eleuthera is blessed with a gentle sub-tropical climate, spectacular colors of the Caribbean Sea and world-class white sand beaches surrounded by rolling hills and quaint seaside villages."

SAFE HARBOR STATEMENT

Certain statements contained in this news release that are not historical facts constitute forward-looking statements which may be identified by words such as "estimates," "anticipates," "projects," "plans," "expects," "believes," "should," and similar expressions, and by the context in which they are used. Such statements are based only upon current expectations of the Company. Any forward-looking statement speaks only as of the date made. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Meritage undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.

Statements concerning expected financial performance, business strategies and action which Meritage intends to pursue to achieve its strategic objectives, constitute forward-looking information. Implementation of these strategies and achievement of such financial performance are subject to numerous conditions, uncertainties and risk factors, which could cause actual performance to differ materially from the forward-looking statements. These include, without limitation: competition; changes in the international, national or local economy; changes in consumer tastes and eating habits; concerns about the nutritional quality of our restaurant menu items; concerns about consumption of beef or other menu items due to diseases including E. coli, hepatitis, and mad cow; promotions and price discounting by competitors; severe weather; changes in travel patterns; road construction; demographic trends; the cost of food, labor and energy; the availability and cost of suitable restaurant sites; the ability to finance expansion; interest rates; insurance costs; the availability of adequate managers and hourly-paid employees; directives issued by the franchisor regarding operations and menu pricing; the general reputation of Meritage's and its franchisors' restaurants; the relationship between Meritage and its franchisors; legal claims;, and the recurring need for renovation and capital improvements. In addition, Meritage's expansion into the casual dining restaurant segment as a franchisee of O'Charley's will subject Meritage to additional risks including, without limitation, unanticipated expenses or difficulties in securing market acceptance of the O'Charley's restaurant brand, the ability of our management and infrastructure to successfully implement the O'Charley's development plan in Michigan, and our limited experience in the casual dining segment. Also, Meritage is subject to extensive government regulations relating to, among other things, zoning, public health, sanitation, alcoholic beverage control, environment, food preparation, minimum and overtime wages and tips, employment of minors, citizenship requirements, working conditions, and the operation of its restaurants. Because Meritage's operations are concentrated in certain areas of Michigan, a marked decline in Michigan's economy, or in the local economies where our restaurants are located, could adversely affect our operations.

Contact Information

  • CONTACT:
    Robert H. Potts
    Vice President - Real Estate
    Meritage Hospitality Group Inc.
    616/776-2600