Industry News

FORT LAUDERDALE CONDO HOTELS BREATHE NEW LIFE INTO AREA

For more than two decades, Fort Lauderdale has been trying to upgrade its lodging offering to match its jewel of a beach. The Atlantic, a 124-unit condo hotel opened in June 2004. It is the first in a string of high-end projects in the development pipeline.

Part of Starwood Hotels & Resorts' Luxury Collection, it will be joined in coming years by a St. Regis, a W Hotel and two projects with links to celebrity developer Donald Trump.

Together, they promise to change the character of the Fort Lauderdale resort strip for the better.

It has been a long time coming. Many observers wondered in the days after the Sept. 11, 2001, terror attacks whether the beach would ever reclaim its glory.

Now there's little doubt about the area's revitalization and its regional impact. For the first time Broward County will have five-star resorts to compete in that niche with Palm Beach and Miami-Dade counties. It will certainly bring business to local restaurants, limousine companies, specialty shops and yacht brokers.

The Atlantic sits on a block between Terramar and Auramar streets along State Road A1A, also known as Fort Lauderdale Beach Boulevard. A four-story base of shops and parking support 11 residential stories that slant away from the ocean on an angle.

Most of the new projects have a similar shape, a result of the city's effort to avoid casting shadows on the beach across the street.

Built by developer Dan Melk, The Atlantic is decorated with marble tiles, granite sink counters and luxurious fabrics. The hotel includes a signature restaurant open to the street along A1A called Trina, run by top New York chefs.

Room rates in season will be in the $250 range, about double the average rate for the destination. A 7,000-square-foot spa and private pool cabanas are among the amenities.

Even more luxurious, just down the street, the St. Regis Resort, Spa and Residences, Fort Lauderdale, is less than a year from being finished.

A third beach project, the W Hotel, has demolished some of the old hotels on its site between Bayshore Drive and Riomar streets and has received a building permit. A fourth condo/hotel project, the 278-unit Q Club, is also in the works.

Demand for hotel rooms in Fort Lauderdale in 2004 is booming. In April 2004, for example, room occupancy averaged 80 percent and the daily rate $101 a night. Bed tax revenue was 17.3 percent ahead of the same month a year earlier.

Experts also say certain associations are more likely to come to Fort Lauderdale after the high-end hotels open whereas before they were limited to Miami or Palm Beach at properties like The Biltmore Hotel in Coral Gables, the Breakers in Palm Beach or the Boca Raton Resort & Club.

Condo conflict

A strategy to upgrade the beach started in the mid-1980s when the city decided to drop college Spring Break as its tourism focus. The oceanfront hotel inventory, geared to the rough-and-tumble habits of college students, needed replacing.

Several city-sponsored development bids did not work out. Only an 18-story Beach Place Towers timeshare was added in 1997.

The following year, Melk submitted plans to raze the shuttered Horizon Hotel and replace it with The Atlantic. Although the city approved the project in 1999, financing, development and operator issues dragged out completion for five years.

Among the difficulties were very specific development rules, which limit building height, size in relation to land acreage, and shadow length. Another challenge was financing. To cut borrowing needs, most of the beach projects include a condominium component.

Some, like the St. Regis, are a mix of outright condo residences, condos that are rented out nightly, and straight hotel rooms. Others, like The Atlantic, are all condos that are rented as hotel rooms for part of the year by the owners.

City officials are determined to preserve part of the beach for resort use, rather than condos. Fort Lauderdale Mayor Jim Naugle said the zoning rules will be enforced. In general, they require that condo owners in the central beach areas fronting A1A use their units no more than 120 days a year, and no more than 60 days in the winter.

The Greater Fort Lauderdale Convention & Visitors Bureau is eager to find hotel guests to fill those rooms. It has begun advertising in publications such as Fortune, Forbes and The Elite Traveler, which are aimed at executive travelers.

Trump allure

Perhaps the ultimate lure for executive travelers would be the latest name to crop up on a beach development: Donald Trump.

The Trump International Hotel will be a 200+ room condo hotel permitted for a 1.8-acre site between Windamar and Terramar streets. The resort will rise on the sites of the old Gold Coast and Merrimac hotels and could open in 2007.

The best-known hotel under that name is the Trump International Hotel & Towers, an office building overlooking Central Park in New York that Trump converted in 1997 into 158 condos and 168 luxury hotel rooms.

Trump is also working on hotel projects in Chicago and Toronto and owns a stake in the Trump International Sonesta Beach Resort in Sunny Isles, opened last year. Those interests are separate from his 56 percent stake in Trump Hotels & Casino Resorts Inc., a publicly traded company that is deep in debt.

For more information on condo hotels, please call Condo Hotel Center at (305) 944-3090 or send an e-mail to info@condohotelcenter.com.