Hotel talks begin again

It’s time for city staff to make a decision and select one of two developers vying to build a downtown hotel.

Last month, both Floridays Development Co. and Jebco Ventures Inc. told commissioners they were willing to change some aspects of their proposals that gave the commission pause and buy the land that sits directly next to the Palm Avenue parking garage on North Palm Avenue at Cocoanut Avenue. The companies’ willingness to make those modifications gave commissioners the confidence to direct city staff to begin negotiations anew with both developers.

City Purchasing Manager Mary Tucker made it clear at a hotel committee meeting, Tuesday, April 17, that it’s time to move forward swiftly and make a recommendation to the commission in the coming weeks.

“We need to work out the details and get this finished,” Tucker said. “It’s time to work out the bigger details.”
Jebco Ventures Inc., which is working with partner McKibbon Group to bring a 175-room chain hotel to Palm, has agreed to buy the hotel site for $1.5 million and is looking for an agreement to utilize 200 parking spaces in the next-door garage. The hotel will most likely be an Embassy Suites.

Floridays Development Co., which is seeking to build a 180-room independent boutique hotel on the site, has also agreed to pay for the site and abandon plans to finance the project through a credit-tenant lease (CTL) that would have relied on the city’s credit rating to get a loan.

The purchase price for the property, however, can’t be negotiated, officially, with either party until the city performs an updated appraisal of the property.

Floridays officials have made it known they will pay the appraisal price for the property. The site last appraised at $3.4 million.

Senior city planner Steve Stancel said that appraisal, which could be complete in the next week or so, “is critical to further negotiations.”

The committee has also asked both developers to provide updated information on their financing structures, because interest rates have changed since the last time negotiations were discussed.

The amount of money each developer is seeking from the city to make off-site improvements, such as utility upgrades, Stancel said, will be crucial when selecting its developer.

A parking-garage agreement that’s flexible and advantageous to the city is also critical. Stancel said it’s not city staff’s intent to define which spaces in the garage belong to the future hotel.

“The hotel coming online might trigger future changes in policy for the garage moving forward,” Stancel said.
“The other key to me,” Stancel said, “is economic impact and the value the project has to the community.”

The committee will hold future discussions with both hotel groups before making a decision and crafting an agreement to be reviewed by the Community Redevelopment Agency and its advisory board. The agreement will ultimately make its way to the commission for a final review.