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Islamorada, Florida's Holiday Isle Resort Getting a $10.5 million Makeover

By Cammy Clark, The Miami HeraldMcClatchy-Tribune Regional News

May 28, 2011--ISLAMORADA -- Holiday Isle Resorts and Marina, once the Upper Keys' most popular hotspot for fun and sun, was so desperate for business last summer that it offered room specials for $69 a night plus two free welcome drinks.

"It did not drive business, but it did tick off other hotel operators," said Bob Van Bergen, who took over as the resort's managing director last July. "Our occupancy was down more than most because our rooms were so poor."

That's about to change. On Tuesday, contractors will begin work on a $10.5 million renovation to transform the rundown hodgepodge of buildings and bars -- located along 12.5 acres of spectacular oceanfront land -- into a modern, but still laid-back tropical resort.

Of the 143 rooms, 129 will get serious makeovers. A couple of aging buildings that housed beach chair rentals and a rarely-used food operation will be torn down to create better views of the water. Lush landscaping will be added to replace the "tumbleweeds."

The former Sport Fish Grill, the resort's main restaurant facility that has been vacant for years, will become the first Shula Burger. It's named for legendary Miami Dolphins coach Don Shula and will have a menu similar to the new Shula's Bar & Grill that recently opened at Miami International Airport.

"But ours also will serve breakfast," Van Bergen said.

The restaurant, which now stores new mattresses for the room renovations, is expected to open in September.

The goal of Holiday Isle's new ownership, Starwood Capital, and new management company, Hersha Hospitality, is to cater to the same crowds that have been coming since the iconic Islamorada resort opened in 1951: serious fishermen, budget-conscious families and wild, fun-loving partygoers.

"They all coexist somehow and have a great time," said Kemper Hyers, head designer for Connecticut-based Starwood Capital.

The sleek design, called "beach resort chic," is not trying to change the charming vibe of the place.

"It's like Holiday Isle has been walking around with a terrible haircut," Hyers said. "We're going to give it a trim and blow it out."

And to bring back some of the old charm, Van Bergen tracked down Holiday Isle's fiberglass statue of a giant red rum runner that wound up at a local liquor store. It's back where it belongs at Holiday Isle, which claims to have invented the frozen concoction.

It's a big change in plans from the mid-2000s, when all of Holiday Isle -- including its World Famous Tiki Bar -- were planned for demolition.

In 2006, during the real estate boom that saw luxury developers gobble up the Keys' campgrounds, trailer parks and aging motels, Holiday Isle was bought for a whopping $98.2 million by Boca Raton-based Ceebraid-Signal.

The plan was for a five-star, Ancient Greece-themed condo/hotel called Ocanos with units going for $1 million plus. With fledgling presales, the project was downgraded to a five-star hotel in 2007.

Then came the real estate crash. Holiday Isle went into foreclosure when VII Holiday Isle Funding, a subsidiary of the global investment firm Starwood Capital, filed to recover $77 million of its loan to Ceebraid-Signal.

In March 2009, Starwood Capital acquired Holiday Isle in a deed in lieu of foreclosure. "Basically, the previous owners handed the keys back to us," said Roy Shanholtz, asset manager for Starwood Capital,

After discussing demolition and rebuilding, Shanholtz said Starwood Capital decided the best option was a major renovation. "We want to turn Holiday Isle back into what it once was many, many years ago," he said, but with modern necessities for today's vacationers.

All rooms will get flat screen TVs and Wi-Fi. The World Famous Tiki Bar gets new TVs, too, but the wood floor, where customers paid $20 each in 1986 to have their names carved into it, will remain intact.

The company already has spent $2.5 million replacing roofs and dilapidated parts of the marina.

Uncertainty of what was going to happen to the property has hurt business for everybody at Holiday Isle, including the many charter boat captains who operate out of the marina.

"I'm staying positive because it would be great for all of our business here; great for all the businesses in Islamorada," said Capt. Steve Leopold, who has docked his charter fishing boat Yabba Dabba Do at Holiday Isle for nearly 20 years, through the good times and recent bad ones. "I think it's one of the best pieces of real estate in the Keys."

The renovation will be in two phases. About half of the rooms are planned to be finished in September. The others are to be done by Thanksgiving.

Another new addition, Van Bergen said, is Christy Cockrell, whose title is "Manager of Events & Fun."

Citing inadequate activities for kids, she is adding arts & crafts, smores on the beach, scavenger hunts, ice cream socials and pool games. For the adults there will be beach volleyball, trivia and dance lessons at the Tiki Bar, Texas Hold 'em poker and beer/wine tastings.

She convinced Van Bergen that $250 was a good investment for a beer pong table.

On Thursday, three friends from Boca Raton asked Van Bergen to take their picture in front of the giant rum runner statue. They had been to Holiday Isle's wild Bartenders Bash a few weekends before and returned because they had such a good time.

"That's what we want," Van Bergen said, "to put the fun back in Holiday Isle."

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To see more of The Miami Herald or to subscribe to the newspaper, go to http://www.herald.com.

Copyright (c) 2011, The Miami Herald

Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.



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