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It's not Quite the Condo Craze of the Mid-2000s, but Hotel Development in
Tampa, Florida is on the Rise with Four Hotel Projects Being Considered

By Michael Sasso, Tampa Tribune, Fla.McClatchy-Tribune Regional News

Jan. 06, 2013--TAMPA -- It's not quite the condo craze of the mid-2000s, but developers are suddenly interested in building new hotels in downtown Tampa.

If all are built, four hotels will be added to the nine operating in the downtown corridor, introducing an upscale, boutique concept to the city's central business district.

At least two of them, a proposed Aloft hotel along the Hillsborough River and a Le Meridien inside the old federal courthouse, have announced detailed plans and could begin building this year.

As planned, they are far different from existing downtown hotels such as the Marriott Waterside. For example, the Aloft hotel planned for the old Mercantile Bank building at Ashley Drive and Kennedy Boulevard will have furniture and flooring in bold blues, teals, reds and yellows, and they feature open layouts to create a loft feel.

The others, one at the Trump Tower site along the Hillsborough River and another off Morgan Street, don't appear to be as far along in the planning stages.

This wouldn't be the first time developers have promised dazzling projects, only to have them fizzle. But the hoteliers insist their projects aren't pipe dreams.

"I can tell you with certainty that ours will be built," promised Punit Shah, whose Liberty Group hotel company is a partner in the Aloft project.

Fresh off a recession, developers are eager to build and city officials are eager for them to create jobs. Tampa Mayor Bob Buckhorn engineered a deal to lease the old courthouse on Florida Avenue to a Memphis, Tenn.-based hotel developer, Development Services Group.

It plans a luxury hotel under the Le Meridien flag, a small brand connected to the giant hotelier Starwood Hotels & Resorts Worldwide. Gary Prosterman, chief executive of Development Services Group, plans to transform the courthouse judges' chambers, courtrooms and hallways into 110 hotel rooms, each with 13-foot ceilings and huge windows.

The Le Meridien will try to win its share of business travelers, but also wants to tap into the artsy types who might want to stay in a historical courthouse and see a show at the Straz Center nearby, Prosterman said.

"We're bullish on Tampa for our particular niche, because heretofore it's been an unserved niche," he said.

The city essentially is giving away the property for the first two years, followed by relatively inexpensive rent of $10,000 to $25,000 a year afterward.

Chuck Ross, a hotel industry consultant with PKF Consulting USA, did a market study on behalf of the Le Meridien project. "Feasibility" can be an elusive term, Ross warned, but the courthouse project benefits from the attractive lease terms with the city and relatively low renovation costs that enhance its feasibility.

The Aloft hotel at the old Mercantile Bank building seemingly would compete most directly with Le Meridien. It, too, is fairly small at 130 rooms and will try to sell a unique concept with funky color schemes and a hip bar.

Prices would probably run $140 to $150 a night, Shah said. Coincidentally, Le Meridien and Aloft are brands under the Starwood Hotels umbrella.

A little farther to the south, the developer Trammell Crow Co. has announced a major office tower/hotel complex on land along Morgan Street, near the University of South Florida's new Center for Advance Medical Learning and Simulation. Bob Abberger, Trammell Crow's managing director in Tampa, couldn't be reached for an update. In the past he has said he wants to build a 350-room hotel.

And lastly, the company that purchased the riverfront land that once was designated as Trump Tower Tampa plans a mixed-use project including a hotel. Bob Owens, CEO and president of O,R&L Facility Services, said his firm recently issued a request for proposals on the project, seeking an architecture firm. He wasn't ready to speak further about it last week.

At the moment, downtown has nine hotels with about 2,950 rooms. The three new hotels would add at least 590 rooms, not counting the Trump Tower site hotel, which hasn't announced a proposed room count.

People who watch downtown real estate could be forgiven for being skeptical. In April 2006, for example, developers were proposing at least 28 condominium projects in downtown, most of which went nowhere.

About the middle of the last decade, developers also were planning at least seven new hotels, but only two were built, the Embassy Suites and the newly renovated Floridan Palace.

In fact, downtown hotels have been doing better lately. Downtown hotel occupancy rates are up 1.1 percent over the past 12 months, according to tourism agency Tampa Bay & Co.

Christine Burdick, president of the Tampa Downtown Partnership, said few hotels are built on a speculative basis. She said time will tell whether all four get financed and built.

"Money to build hotels is very cyclical and very market-driven," Burdick said. "There is very little money available if there isn't a demand."


(c)2013 the Tampa Tribune (Tampa, Fla.)

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