January 16, 2008 Jason Garcia | Sentinel Staff Writer January 14, 2008 Walt Disney World is in the midst of building a $110 million, 15-story tower next to its iconic Contemporary Resort that likely will feature time shares -- bringing the units closer to the Magic Kingdom than ever before. Disney will say little publicly about the fast-rising Contemporary addition. The new tower already stands five stories on 14 acres just to the north of the resort's signature A-frame main building, which was just the second hotel at Disney World when it opened a few months after the park itself first welcomed guests Oct. 1, 1971. But there is ample evidence Disney plans to use the tower for time shares. Building-permit applications filed with Reedy Creek Improvement District identify the owner of the property as a company called JMSRM Inc. State records show that is a fictitious name created in August 2006 by Celebration-based Disney Vacation Development, parent company of the Disney Vacation Club time-share arm. In a pair of letters, an environmental consultant hired by Disney calls it "a proposed Disney Vacation Club (DVC) Resort at the Contemporary hotel." And in a recent filing with the U.S. Securities and Exchange Commission, Disney, which has built about 2,400 time-share units at eight resorts, revealed that it has about 680 more under construction at Disney World. Disney has only publicly acknowledged one ongoing time-share construction project in Orlando: Kidani Village, an extension of the partially completed Disney's Animal Kingdom Villas. That project is expected to have 340 units when finished in spring 2009 -- leaving another 340 or so unaccounted for. Construction records for the Contemporary expansion call for 295 three-bedroom suites. Some could be sold as separate two- and one-bedroom units. Still, Disney will not talk about the Contemporary addition. "We have plans to expand our Disney Vacation Club business both on Walt Disney World property and at other vacation destinations in the future. However, we don't have anything formal to announce today," Disney Vacation Club spokeswoman Rena Langley said. Reasons to stay mum Analysts say Disney may have strategic reasons for holding back on a Contemporary time-share announcement. Disney, which has invested deeply in the time-share business in recent years, is still in the midst of peddling time shares in Animal Kingdom Villas and Saratoga Springs Resort & Spa, both at Disney World. Announcing future time shares now in the Contemporary -- which are likely to be hugely popular, given their prime location along the Magic Kingdom monorail and within walking distance of the park -- could slow the current sales, said Robert LaFleur, a leisure-industry analyst with Susquehanna Financial Group. Disney time-share buyers, though they own a real-estate interest, do not purchase specific units in individual resorts; rather, they buy points that they can redeem for rooms in the company's time-share resorts or elsewhere. But buyers must purchase those points from a "home" resort -- there are a limited number of points available for each facility -- and they are given priority at that particular resort when booking a stay. "If you're trying to pitch a sale at Saratoga Springs or trying to pitch a sale at the Animal Kingdom, and somebody's aware that a year from now there's going to be stuff available in the Contemporary . . . that would cannibalize your other sales, I would think," LaFleur said. It is also possible that Disney could decide against marketing the Contemporary addition as time shares and use the building for more hotel rooms instead. Company executives said recently that Disney World hotels are averaging 90 percent occupancy, and the Contemporary commands some of the highest room rates of them all: A one-bedroom suite can run as high as $1,310 a night. "I know [Disney has] talked about a tower there for a long, long time," even before the company's interest in time shares, said Reedy Creek District Administrator Ray Maxwell. The Contemporary addition is sure to be a lavish one. Records say the crescent-shaped tower will include a host of amenities, including a swimming pool and water-play area with an outdoor bar and a water slide; a spa; tennis courts; a barbecue pavilion; and a 499-person lounge on the 15th floor featuring a restaurant and bar. The new tower will be connected to the main building by a pedestrian bridge. The project price tag: $109.6 million. Completion likely in 2009 According to development records, Disney broke ground on the expansion in January 2007. The construction, which began with the demolition of an older, three-story wing of hotel rooms, is expected to take about 32 months. That would put the completion date about September 2009. The construction comes with Disney already in the midst of a major time-share building boom. Last fall, Disney announced that it will build an 800-room resort in Hawaii in which at least half of the rooms will be time shares and that it will add 50 two-bedroom villas to Disneyland's Grand Californian Hotel & Spa, which will be the first time shares at Disney's original resort. Disney Vacation Club President Jim Lewis has also said that the unit is considering projects in Lake Tahoe and the Caribbean. The company currently has six time-share locations at Disney World and one each in Vero Beach and Hilton Head, S.C. Time shares have blossomed across the hotel industry. Jeremy Glaser, an analyst with Morningstar, said they are especially lucrative for a company such as Disney because time shares lock in future trips to its theme parks. "They're going to make money from your park admission and all of that ancillary money you're going to spend every time you come to Orlando," Glaser said. "They have an added bonus to get you to commit to taking vacations there for years." Jason Garcia can be reached at 407-420-5414 or email@example.com.