Fort Lauderdale beach hotel development morphs
South Florida Business Journal - by Dan Ruck
A four-star hotel that will replace most of what is now Pelican Beach Resort at the north end of Fort Lauderdale's beach is the latest project to be announced along that popular strip of South Florida oceanfront.
The Pelican Beach Hotel will have 168 rooms and rise to 12 stories above 400 feet of oceanfront at 2000 N. Atlantic Blvd., said Stephan Kruse, owner of the development company, Oceanside Properties. He wouldn't disclose construction costs for the project, but it's scheduled to start next April with the demolition of eight of the aging hotel buildings at Pelican Beach. A ninth building containing 25 already-updated hotel units will remain, Kruse said. Financing has not been secured.
Fort Lauderdale beach has been the focus of development activity and speculation for years, but the short-term prognosis among some hotel experts and market analysts is mixed as certain projects have been forced to reconfigure development plans.
A case in point: The Pelican Beach Hotel's Fort Lauderdale architect, Jeff Falkanger of Jeff Falkanger & Associates, said it will be the first new hotel built on Fort Lauderdale's oceanfront since the Marriott Harbor Beach Resort debuted at the southern end of the beach in 1984. But, Falkanger isn't the first to make such a claim.
Three years ago, Daniel J. Melk, VP of Fisher Island Holdings, said the same thing about his plan to build the Marquis Hotel on North Atlantic Boulevard just south of Sunrise Boulevard between Terramar and Auramar streets.
The plan then was to model the Marquis after the five-star boutique hotels of Europe, said Melk, whose firm manages the Fisher Island Club in Miami.
But the Marquis never got built.
Plans revamped
Today, the Marquis plan has been revamped as the 15-story Atlantic Hotel Condominium. No contractor has been selected yet to build the luxury boutique condo and hotel building, said Carolyn Brock Ellert, a corporate VP with Fisher Island Holdings, but a sales model is open at 610 N. Atlantic Blvd.
The Atlantic is planned to have 118 condo/hotel units, which will sell for between $300,000 and $3 million or more, Brock Ellert said.
Construction is slated to start in mid-October. Ironically, the site is the same one on which Kruse wanted to build a 13-story, 107-room hotel several years earlier. The less-than-one-acre site once contained the prominent Horizon Hotel.
Similarly, there was a plan in place early this year to build something called the Da Vinci Waterway Condominiums at 529-545 Bayshore Drive. Previously, the project was called La Palazzo. The Da Vinci was to be a 12-story condo tower of 69 units.
Today, plans are being made at that address for a groundbreaking in October for Water's Edge Luxury Condominium Residences, a 16-story tower containing 64 residences priced from $350,000 to more than $1.9 million, said Marc Streeter of the Adler Network in Fort Lauderdale, publicist for the project. It has not yet secured financing.
Streeter said the top floor will be devoted to two 4,000-square-foot penthouses, and units on the lower floors will range in size from 1,600 to nearly 3,000 square feet under air.7
Grand plans
Further south on the beach, developers are planning larger, ritzier projects at a time when some industry analysts question the outlook for hotel profits.
Hotel revenue per available room slid 4.1 percent nationwide in June, according to a report published on the Web site grantsinvestor.com. The drop came on the heels of declines of 2.6 percent and 4.4 percent in April and May.
PricewaterhouseCoopers predicted that for 2001, revenue per available room will decline three tenths of 1 percent from 2000 levels. In the 32 years that data has been kept, year-over-year revenue has declined once, and that was during the last recession in the early 1990s, the firm said.
In a separate Real Estate Value Cycles report, PricewaterhouseCoopers predicted "most markets will continue to contract for 18 months with a turnaround projected for 2004."
Given that outlook, actual top-flight hotels should do well in South Florida, said Guy Trusty, hotel market analyst and president of Lodging and Hospitality Realty in Miami. There are three in South Florida that might be considered five-star, he said: the Mandarin Oriental on Brickell Key, the Four Seasons being built on Brickell Avenue in Miami, and the St. Regis on Fort Lauderdale beach.
But competition will be more fierce among less highly rated hotels, Trusty predicted. There are three Ritz-Carltons planned to be opened in Miami, and all of them will fight to take customers away from the five-stars, Trusty said.
On Fort Lauderdale beach in Broward County, CL Financial, a conglomerate based in Trinidad, and Intercontinental Hotel Corp. are planning to build the Capri, a $150 million hotel, timeshare and retail complex that Dan Adache of Adache Associates, Fort Lauderdale, predicts will be the biggest undertaking of all in the area.
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