Jan. 15–DAYTONA BEACH — After decades of one big beachside project after another quietly collapsing and fading into obscurity, the most expensive private development between the Halifax River and Atlantic Ocean in the city's history is about to rise out of the sand.
The Daytona Beach Convention Hotel & Condominiums, a $192 million project located at the eastern tip of Oakridge Boulevard, is expected to secure its building permits within the next few weeks. Construction will begin shortly after that, city and company officials said.
In about four years, two 300-foot-plus towers stacked with 120 condos and 501 hotel rooms will change the city's skyline and perhaps change beliefs about what's possible in Daytona Beach.
"It'll be exciting for the beachside," said City Manager Jim Chisholm. "Economically it's going to be great. It's a big sign people recognize Daytona Beach is good for investment. I think this community is pretty positive and pumped up about what's happening."
Some local residents had become jaded by years of failed projects that were touted as game changers that would turn things around on the beachside. They had become convinced the Oakridge Boulevard project headed up by Russian company Protogroup was going to be added to the pile of failed dreams that includes the oceanfront Hard Rock Hotel and Restaurant that pulled the plug on itself six months ago.
The skeptics had become convinced Protogroup's new parking garage for the complex, which has taken shape over the past few months and is nearing completion, was the only new development they were going to see on the vacant 4.5-acre site just south of Seabreeze Boulevard.
"We continue to bark up these trees and go down these rabbit holes," Paul Zimmerman, who has lived in Daytona Beach all of his 67 years, said before he found out revised building permit applications submitted Dec. 27 will soon be approved. "Eastern Volusia County has lost its amenities to draw people."
After being told shovels are going to hit the sand soon, Zimmerman said, "I hope that's true. But seeing is believing."
Protogroup insists it's charging forward, tackling both the condos that will be built on the north end of the property next to the Plaza Resort & Spa, and the hotel that will be built on the south end. The site is spread across three corners of the intersection with State Road A1A.
"We need to fix some minor issues with the building permits, and I believe that we can pick them up in four weeks," said Protogroup Vice President Alexey Lysich. "We will start the construction of both towers right after that. We plan to start selling condos right after the foundation. We plan to finish the hotel tower in 30 months, and condo tower in one year after the hotel tower."
Mike Garrett, the city's permits and licensing director, confirmed that "we just have some housekeeping issues."
"Within the next four weeks the permits will be issued," Garrett said. "All the heavy lifting has been done."
An Atlanta-area contractor, W.G. Yates and Sons Construction Co., has been hired for the job, Garrett said.
PLANS READY FOR REALITY
Protogroup is run by Lysich, his father and his brother. They live part of the year in Palm Coast and the other part in Russia. Protogroup owns a chain of six supermarkets in Russia as well as a hotel in Montenegro and four hotels in St. Petersburg, Russia.
Protogroup's vision for its Daytona Beach property is to create a 1.1 million-square-foot complex with two oceanfront towers connected by a catwalk suspended over the Oakridge beach approach to maintain public access to the sand.
The north tower is planned to have 31 floors with 120 owner-occupied condo units and 42 hotel rooms. It will span nearly 592,000 square feet and include nine levels of structured parking. Construction is expected to cost $95 million and take four years to complete, according to the building permit.
The south tower will have 27 stories and include 459 hotel rooms. It will hold 540,759 square feet and cost $90 million. Construction will start on the south tower first, and it's estimated to take 30 months to complete.
Plans also call for 7,500 square feet of retail space in street-level shops fronting State Road A1A, a 7,000-square-foot hotel restaurant and 18,000 square feet of ballroom and meeting space.
Across the street on the west side of A1A is the nearly completed five-story, 517-space parking garage. The concrete block structure built by Commercial Construction Inc. of Daytona Beach is already up and most of it has been painted white.
Protogroup bought the property in March of 2012 for $6.3 million. The site is on a section of the beach that doesn't allow vehicle traffic, a plus for investors and an advantage the Hard Rock site south of International Speedway Boulevard did not have.
On the northern half of the property was the 1950s-era SeaSide Inn motel, which had been sitting empty and wrapped in a chain-link fence until it was demolished in 2014. The southern half of the property, once covered with hotels, is also vacant now except for the two-story Sea Dunes motel that's been owned by a local family since 1960. Plans show the huge hotel-condo buildings wrapping around the tiny Sea Dunes, which sits near the edge of A1A.
The project could mean a new chapter for the Sea Dunes, said local attorney Michael Kundid, who co-owns the motel with his sister, Paulita.
"The Sea Dunes has been continually operated by our family for the past 57 years," Kundid said. "We are in discussions with urban planners and engineers about using our premises and existing structures for a new business to serve the thousands of people who will be staying or living at the new project. We see it as a great opportunity to grow with our beloved community."
The Protogroup project stalled when the financing hit some snags and the eastern side of the property turned into a dusty, barren expanse encircled in rickety wooden fencing that's been shredded and toppled by Hurricane Matthew and other storms.
The original plan was to be open by the fall of 2015. But instead late 2015 found Protogroup officials asking city and county government leaders for, and receiving, extensions that could delay completion of the development to the end of the year 2021.
Protogroup has secured a letter of intent to partner with Preferred Hotel Group to make the property a franchise hotel. Preferred Hotel Group comprises more than 650 independent hotels and resorts in more than 85 countries. Its brands include Preferred Hotels & Resorts, Preferred Boutique, Summit Hotels & Resorts, Summit Serviced Residences, Sterling Hotels, Sterling Design and Historic Hotels Worldwide.
Protogroup officials have said they couldn't sign an agreement with Preferred Hotel Group until they had building permits and construction had started.
An agreement Protogroup and the city negotiated in early 2013 will allow Protogroup to be reimbursed some of its impact fees and receive some city money because part of the site is located in a redevelopment area.
The enormity of the project will require upsizing the water and sewer lines running from State Road A1A to Peninsula Drive. Protogroup has agreed to increase the size of the pipes beyond what it needed for the project so the entire area has capacity for more development in the future. When that work is completed, the city will reimburse Protogroup for its costs using impact fees the company paid.
The project site straddles a beach approach that will be improved and remain open to the public. The estimated cost to install decorative lights, pavers, landscaping, signage, a small fountain and stormwater infrastructure is about $450,000, according to city records. The city will reimburse Protogroup about $90,000 per year over five years for that work, records show.
KEEPING THE FAITH
City Commissioner Rob Gilliland never lost hope and figured the project would be back on track once lending institutions felt more comfortable with large loans again.
"The Russians have had a lot of experience," Gilliland said. "They have a number of properties they've been successful with, and it wasn't by making rash decisions. They're the ones who I thought had the most likely path to construction."
With the condo hotel site a five-minute walk away from Volusia County's Ocean Center, hopes are running high for what the new hotel could do for pulling in large conventions and spurring new restaurants and shops to open nearby.
Former Mayor Glenn Ritchey, who was involved in the earliest discussions with Protogroup in 2012, sees good things ahead. Ritchey said he'll enjoy watching the Daytona beachside's 25-year dry spell with new hotel construction come to an end.
"It's great to see it finally happen," said Ritchey, who has a riverfront home on the beachside. "It seems like it has the potential to be something really great. I'm just really excited that it's going to be a linchpin and an encouragement for other development on the beachside. It's all good news."
Nearly lifelong beachside resident Mike Denis felt confident about the project once the parking garage started to go up.
"The parking garage to me was a level of commitment we didn't see for these other projects," said Denis, president of the South Atlantic Neighborhood Association. "I'm looking forward to getting something built finally."
New City Commissioner Aaron Delgado, whose home and law office are on the beachside, said it's "great" and "exciting."
"I'm glad to see progress," Delgado said. "Hopefully we'll see a ripple effect."
Current Mayor Derrick Henry is relieved to see that the project emerged unscathed after weathering a tough economy.
"This is a home run without a doubt," Henry said.
