For now, Beach Resort and Suites will not pursue rebuild
By John Morton
It was nearly two years ago when Mike Holderness and Dave Balot, co-owners of the Siesta Key Beach Resorts and Suites, notified Sarasota County that they wanted to level their 55-room hotel at 5311 Ocean Blvd. and replace it with a 170-room complex. It wasn’t planned to be taller than what was then the allowable 35 feet, although two levels of parking would go in place below the buildings. FEMA allows that in flood-risk locations like Siesta Key.
Theirs was the only hotel on the island for decades, its origin being the 1950s with add-ons that followed. The business partners bought it in May of 2017.
Today, on the heels of a county decision late last year to allow unlimited density as it approved two high-rise hotels, along with two separate lawsuits fighting the county’s decision, the teammates are scrapping their pursuit for the time being. And, if things don’t change, maybe altogether.
One of the hotels is to be built at eight stories and 170 rooms on Calle Miramar on less than an acre, just a few doors down from the Beach Resort and Suites. Holderness’ and Balot’s operation will be literally in its shadow.
“If unlimited density is here to stay and the hotel on Calle Miramar is built next door, Mike and I most likely will not be able to financially compete,” Balot said, “as we have invested more than $15 million into purchasing and upgrading our existing hotel, whose structure is functionally obsolete. We’ve been forced to, as they say, put ‘lipstick on a pig.’”
The purchase price was $9.7 million.
He added, “If in 2017 we had the option of replacing or even partially rebuilding our existing hotel, even with the same amount of rooms, I can assure you we would have done things much differently.”
Said Holderness, “The county has made a very unfair playing field for all pre-existing hotels, including ours. Hence the reason for the need to re-develop the property. If not, we’d be left in the shadows in more ways than one.”
The request by developer Robert Anderson to build the Calle Miramar was the first of what would turn out to be four proposals for new hotels within one year. That was a shocker, considering the Key’s hotel history.
“Prior to closing (in 2017), we checked with zoning and were advised we’d remain the only commercial general hotel on Siesta Key,” Holderness said. “Hence the big number we paid.”
Added Balot, “Upon hearing about the proposed hotel next door and, at the time the need to change the county’s Comprehensive Plan to allow for more hotel units on Siesta Key, Mike and I put our proverbial hat in the ring as we believed, if there was anyone that should have a new, FEMA- and ADA-compliant hotel, it should be our pre-existing hotel.
“After Unified Development Code Amendment 32 was approved granting unlimited density, and the potential for multiple new hotels on Siesta Key, it just didn’t make sense to continue to move forward until the lawsuits get resolved and we see if unlimited density is here to stay.”
All this after the business owners felt confident that they were protected by the creation in 1989 of the Siesta Key Overlay District, which protected the barrier island from over development. If the lawsuits overturn unlimited density (the trials are next spring), they might revisit their desire to build a new, larger hotel, they said.
They are willing to wait things out, Balot said, despite recently receiving separate offers for their property from out-of-town developers of $28 million and $33 million, Balot said. They turned down both.
“We didn’t think that would be in the best interest of the community,” said Balot, who previously lived on the Key and is in the process of building a new home here. “Mike has a long history here, and so do I.”
Meanwhile, what’s the immediate future of their hotel?
“Currently, we have a property that was originally built in the 1950s, ‘60s and early ‘70s. Like all old buildings, they need constant upkeep and maintenance. During this offseason, we plan to refresh and repair the rooms as we get ready for next season and ultimately the legal determination of unlimited density,” Balot said.
The ongoing upkeep comes on the heels of an often turbulent five years.
“We have put almost $3 million into upgrading the property,” Balot said. “Our major remodel was primarily a complete exterior overhaul, which included a new pool and spa, the addition of pool and office bathrooms, two new semi-handicapped accessible rooms, new pavers, new landscaping, new irrigation, new stucco on all the buildings, two new roofs, all new exterior doors and programmable locks, some new hurricane windows, new railings, the new tiki lounge, and a lot of smaller repairs that had been neglected by the prior owners.
“After the remodel, which shut the hotel down for more than nine months, we slowly started to build occupancy and reputation back. Then COVID shut us down again. During COVID, Mike and I kept all of our employees gainfully employed by having our staff clean, pick weeds, paint, etc.”
And decisions on upgrades often had to be balanced with government requirements.
“We were often forced, under the FEMA 50% rule, to choose between new kitchens or, say, hurricane windows,” Holderness said.
(The FEMA 50% rule is a regulation of the National Flood Insurance Program that prohibits improvements to a structure exceeding 50% of its market value unless the entire structure is brought into full compliance with current flood regulations.)
Finally, the owners hope things soon shake out in a way that they feel is fair and best for Siesta Key.
“First things first, making any comparison to an all-new hotel and one that’s pre-existed and still in operations is a highly inappropriate comparison,” Holderness said. “We paid for our hotel, we’re licensed as a hotel, we have a hotel use that pre-exists the 1975 zoning code and Siesta Key Overlay District, and it’s still a hotel today with existing operation.
“Besides, redevelopment has far less impacts than all new.”