|By Tom Stieghorst, South Florida Sun-Sentinel|
Knight Ridder/Tribune Business News
Jan. 30, 2005 - Since the raucous Candy Store bar closed a dozen years ago, there hasn't been much of anything on the corner of Castillo Street and State Road A1A to draw Fort Lauderdale tourists to its magnificent view of the ocean.
This year that may change.
If all goes as planned, the $140 million St. Regis Fort Lauderdale Hotel and Residences will open in December, planting a flag in the sand for luxury travel.
But as redevelopment of Fort Lauderdale beach -- Broward County's prime tourism asset -- moves forward, hotel owners with older but viable businesses are at a crossroads. While their new neighbors could bring a wealthier crowd, they also embody tougher competition.
Hotel operators that haven't made major upgrades since the heyday of The Candy Store now must decide whether to spend tens of millions of dollars to keep pace, or risk slipping into the shadows of larger hotels now in the pipeline.
"Clearly there's going to be some competitive challenges," said John Tolbert, president of sales/marketing for the Radisson Bahia Mar Resort, which along with the two Sheraton hotels on the beach will look dated next to the new crop of lodgings.
Most of Fort Lauderdale's oceanfront was first developed in the 1940s and 1950s. Its renaissance has proceeded in fits and starts. But the entire region has an interest in its improvement because nearly half of all visitors to Broward head for Fort Lauderdale.
A revitalized beach, in tandem with the county's dynamic airport, would likely put the city in a new light on vacation maps nationwide.
Signs of the transformation are beginning to occur. Last year two new properties opened. The Atlantic, a 124-unit condo/hotel run by a unit of Starwood Hotels & Resorts, replaced the much smaller Horizon Hotel, while the 156-unit Best Western Pelican Beach Resort was redeveloped by the Kruze family from a 109-room complex that was outmoded.
A third property, the St. Regis, is well into construction, but suffered a blow last month. John McDonald, managing partner of Castillo Grande LLC, which was building the hotel, died unexpectedly of heart failure at age 59. The 23-story hotel is topped off and is expected to open late this year.
"There's glass up to the 17th floor," said Steve Shalit, general manager of the 223-unit structure, which combines condominium and hotel uses.
Shalit said that although McDonald was pivotal to the project, there are others who can step into his shoes. Castillo Grande partner Fred Bullard, a Tampa real estate veteran, will be the main hand steering the hotel to completion.
Bullard owned the defunct Jacksonville Bulls pro football franchise and owns part of several restaurant chains.
"He's not a newbie to the project. He's been involved in the decision-making since Day 1," Shalit said.
When it opens, the 169-room St. Regis will be Fort Lauderdale's first true luxury hotel. It expects to charge between $650 and $800 a night in the 2006 winter season, a spokeswoman said.
That, in turn, will let the county visitors bureau reposition Fort Lauderdale as an upscale resort.
Locally, redeveloped hotels mean higher taxes to the city and county governments and jobs in the upper end of the hospitality sector. The 996-room Westin Diplomat that opened in Hollywood in 2002 generated 1,000 jobs and about $6.7 million a year in tax revenue.
No hotel proposed for Fort Lauderdale beach will be that big. The closest will be the W Hotel planned for the block between Bayshore Drive and Riomar Street that once held The Bahama Hotel and several smaller lodgings.
Dan Adache, a partner in the group developing the W, said the 517-unit project is under way and will start vertical construction this summer, with an opening set for 2007. The W is another brand belonging to the Starwood group.
Also moving forward is the Trump International Hotel & Tower, being developed on the site of the Gold Coast and Merrimac hotels, now being demolished. Developed by New York's Stillman Bayrock Merrimac LLC, the plan for the 24-story building was recently modified to reflect a design by renowned architect Michael Graves.
The revision dropped the number of units from 320 to 298 and reduced the restaurant from 16,000 square feet to 3,815 square feet. A 15,000-square-foot ballroom was eliminated altogether, as was a vertical wing of rooms.
Trump International is a hotel operator affiliated with developer Donald Trump, and is separate from Trump Hotels & Casino Resorts Inc., which filed for Chapter 11 bankruptcy in November. Its flagship hotel is housed in a 52-story skyscraper overlooking New York's Central Park.
Competing in that league will be new for some of Fort Lauderdale's venerable resorts. Some are plotting improvements while other are still mulling their options.
At the Sheraton Yankee Trader & Clipper, a major redevelopment has been in the works for close to two years. A serious obstacle has been capital. The Gill family is seeking a partner to share costs, estimated at $35 million to $50 million.
Gill Hotels President Linda Gill declined to be interviewed, citing ongoing talks, but agreed to answer written questions. She said there are talks under way with several parties with differing strategies. "Our goal is to assure that our hotels remain premier properties," she wrote.
The 501-room Clipper was built in 1956, with the 460-room Trader added about a mile to the north in 1964. Gill said they have received about $3 million annually in routine upgrades, plus a $7 million renovation in 2001.
That money bought remodeled guest rooms, expanded function space at the Trader, built new ballrooms at the Clipper and enlarged gift shops and sports facilities. The Trader got a new restaurant, Shula's on the Beach, in 1996.
While some guests praise the hotels, others say an overhaul is overdue. Richard Christiansen, creative director at a New York magazine, stayed at the Clipper for a conference earlier this month and found its musty and dark interior "very depressing."
"Sheraton needs to throw some money into this hotel, " Christiansen said. "It really needs a face-lift."
Another Fort Lauderdale hotel that could be in the market for a makeover is the Radisson Bahia Mar, which turns 30 this year. The yachting center surrounding the 296-room hotel got a $17 million renovation last year under former owner Boca Resorts Inc., which sold the hotel and four others for $1 billion last month to private equity firm Blackstone Group.
With 26 acres of docks and land fronting both the Atlantic Ocean and the Intracoastal Waterway, Bahia Mar is a prime spot for a luxury brand. "The great opportunity with Bahia Mar is that the site location is unparalleled," said Tolbert, marketing head for the new management group.
But the Radisson brand has a workaday middle-market image, and the hotel tower was designed and built in the disco days of 1975.
Tolbert, the marketing head of the management company installed by Blackstone, said the group is comfortable with the positioning of the hotel, which gets rates of $99 to $269 a night. He said it would be premature to discuss improvements, but added that getting squeezed by his new upscale neighbors on the beach is not at the top of his list of concerns.
"They will help the destination more than hurt any of the individual hotels there," Tolbert said.
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