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Developer Richard Kessler Redesigning the $100-million the Grand Bohemian Hotel
 & Residences with More Hotel Rooms and Fewer Condos; Weakening Condominium
 Sales in St. Peterburg Prompts Change

By Steve Huettel, St. Petersburg Times, Fla.McClatchy-Tribune Business News

July 1, 2006--ST. PETERSBURG -- With downtown condominium sales weakening, the developer of the Grand Bohemian Hotel & Residences is redesigning the $100-million project with more hotel rooms and fewer condos.

Richard Kessler has asked the city to modify development plans for the 28-story tower to include 260 hotel rooms, an increase of 50 percent, and nearly twice as much event and meeting space.

He wants to cut the number of residential condos, priced from $500,000 to $5-million for penthouse suites, from 82 to 52.

Representatives of Kessler met with St. Petersburg officials last week and "were concerned about getting enough condos sold to complete the project," said Rick Mussett, the city's development administrator.

Kessler said "several" customers made condo reservations, which don't require nonrefundable deposits. The main reason for the change, he said, is the hotel would be more profitable with more than 200 rooms.

His development deal with the city requires Kessler to close on the property, part of the old Maas Brothers department store site, by Aug. 15. A contract amendment scheduled to go before the City Council on Thursday would move the deadline back one year and allow the project changes.

Construction was originally set to begin last month but has been moved back to early 2007, said Kessler. The Grand Bohemian will open sometime in 2009.

Some 3,000 new condos are under construction or planned for downtown. "We've got so many condos going up, we'd like to see more different types of uses," said Mussett. "We've been encouraging them all along to have as many hotel units as possible." Kessler's company, the Orlando-based Kessler Collection, specializes in high-end resort hotels built to AAA four-diamond standards. Pinellas has five four-diamond hotels, but only one downtown, the Renaissance Vinoy Resort.

The Westin Grand Bohemian across from City Hall in Orlando features original artwork in rooms, a fine-dining restaurant at street level and nightly performances on an Imperial Grand Bosendorfer piano, one of two in the world.

The St. Petersburg hotel will reflect the same standards and raise the bar for Tampa Bay area hotels, says Kessler. "It will be the first one of that quality, the first true luxury hotel in Tampa-St. Petersburg," he says.

But unlike the Orlando version, the local hotel won't carry the brand of Westin or any other chain.

A hotel "nameplate" establishes a level of quality. More importantly, it brings in bookings through the chain's powerful reservations system and customer loyalty programs. But it also costs hotel owners a significant share of revenues About one-third of reservations at the Orlando Grand Bohemian come through Westin or its parent, Starwood Hotels & Resorts, said general manager Roger Ploum.

The success of the first Grand Bohemian in Orlando makes Kessler "quite confident" the brand can stand on its own and he plans to expand it to future properties, said spokeswoman Mary Kenny.

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To see more of the St. Petersburg Times -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.sptimes.com.

Copyright (c) 2006, St. Petersburg Times, Fla.

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