Beach by Design bedevils city council struggling with developers' requests

CLEARWATER – While the city's blueprint for future development on Clearwater Beach has haunted the city council most of the year, a municipal code allowing for ownership of hotel rooms brought shivers to some board members earlier this month.
Beach by Design, the Clearwater Beach master plan, was adopted in 2001 and amended seven times, the last in 2010. It recognizes a need to find a balance between residents and tourists. Throughout the year, the council and hotel developers have been debating provisions in the plan concerning building plots; setbacks; mass, height and elevation; exterior façade; view corridors; and room density.
Those discussions have led the council and city staff to conclude that Beach by Design should be tweaked again, this time to allow for greater setbacks; to prevent walling off views of the Gulf of Mexico; and perhaps to eliminate quibbling among developers trying to protect perceived entitlements to those waterfront vistas and other supposed rights like the number of hotel rooms allowed. 
This year, seven developers have come before the city with building proposals, an unusually high amount of interest as compared to previous years.
To date, the city has approved the construction of:
• A 171-room Hampton Inn & Suites next to the Quality Inn Hotel at 655 South Gulfview Blvd., of which 60 rooms will come from the hotel density reserve.
• An 85-room boutique hotel at the Sea Captain Motel at 40 Devon Drive; 53 of those rooms will be from the reserve.
• A 102-room hotel at 669 Bay Esplanade, of which 55 rooms will come from the reserve.
• A 230-room hotel by Ocean Properties at the former Adam's Mark at 311 South Gulfview Blvd.
• A 202-room hotel called The Views that will replace the Wyndham Garden hotel at 691 S. Gulfview Blvd., with 92 of those rooms coming from the reserve.
Pending the development review cycle are agreements for:
• A proposed 180-room hotel that will replace the Beachview Inn at 325 South Gulfview Blvd., of which 100 rooms will come from the reserve.
• A proposed 103-room hotel that will replace the Gulf View Hotel at 625 South Gulfview Blvd., with 69 of those rooms from the reserve.The objective of a 2008 amendment to Beach by Design that proposed a hotel density unit pool of 1,385 rooms was an attempt to compensate for the loss of older motels, which were being replaced with residential buildings like condominiums.
The density reserve, an effort to attract more mid-price hotels to the beach, allows developers to build more rooms than otherwise would be allowed. For such a hotel to be a financial success in an area with expensive real estate, developers need as many rooms as they can get.
The incentive would allow as many as 150 hotel rooms per acre vs. 50 rooms per acre. Prior to this year, some 947 rooms remained available in the hotel density reserve.
The rush by developers to put their projects before the council can be attributed to concerns that if Beach by Design is altered, it will inhibit their ability to stay competitive with much of the hotel development happening on the barrier island.
In addition, a Community Development Code provision that hadn't seen a lot of traction until now involves fractional ownership units, in which several unrelated parties can share in, and mitigate ownership of, a high-value asset.
As it turns out, two development agreements approved this past summer included clauses allowing the hotel developers to sell some units.
The provision came up again when planning staff sought city council direction regarding the developer's request that fractional ownership units be allowed at The Views, which will replace the Wyndham Garden.
Vice Mayor Paul Gibson noted that another hotel project, planned for Bay Esplanade, had a “fractional (clause) in its scope” and that “I'm embarrassed to say I missed it.”
City Attorney Pam Aiken replied, “I'm embarrassed to say that everybody appears to have missed it.”
In The Views agreement, 52 of the 92 hotel density reserve units, or 25 percent, can be set aside for sale.
“We're giving away 92 units of density reserve to get 40 new hotel rooms?” Gibson asked. “I thought the plan (Beach by Design) was to compensate for lost hotel rooms? We're giving away a city asset.”
A vote for the project, he said, funds the developer's equity because units could sell for $75,000 to $100,000.
If developers are allowed to sell hotel rooms, that also would mean less “bed tax” revenue for the city, Gibson noted.
Pinellas' Tourist Development Council reported earlier this month that the county is on track to break a $30 million record in tax collections on overnight accommodations. Clearwater and Clearwater Beach contribute as much as 38 percent of the county's bed tax proceeds.
Because The Views agreement met city code and Beach by Design criteria, the project was approved by a 4-1 vote, with Gibson dissenting.
The next developer on the council agenda asked for the same privilege.
Don Mastry of Mainstream Partners LLC, representing the applicant for the 180-room Seaway Hotel, told the council, “I don't want my client to be denied rights that other property owners are being granted.”
Gibson scoffed, “Well, it didn't take long to set a precedent.”
The development agreement asks for allocation of 100 units from the hotel density reserve. The city's preliminary report included a provision that prohibits the conversion of any hotel rental unit to a residential use.
Mastry countered that it was only fair that his client receive the same consideration as the other developers who were approved for fractional ownership units. “You're getting a beautiful hotel on this site,” he said.
Gibson suggested the council postpone further discussion until the Nov. 7 meeting to allow time to determine whether rooms from the hotel density pool could be used by the developer as fractional ownership units.
“I would like to know what our policy is on fractional ownership ... and to make sure we're getting 100 percent of a hotel, not 75 percent.”
Mastry replied, “We'll give you 100 percent if everybody else gives 100 percent. If everybody is giving 75 percent, I think it's only fair that we give 75 percent. I don't think I'm being unreasonable.”
An adamant Mayor George Cretekos said, “What we're saying is that on Coronado we're going to build, and we're going to build. … There's going to be no view corridor.
“This mayor doesn't care what Beach by Design says. He wants view corridors.”
That prompted Councilman Jay Polglaze to ask, “Are we not going to follow Beach by Design? We have not made proposals to change it. We're reviewing and going to give conditional approval right now on this project as presented. We're not here to debate Beach by Design. It has not been on the agenda.”
City Manager Bill Horne said, “This is making me grow hair. … Our staff is obligated to follow Beach by Design until the council amends it.”
The city attorney reminded the council that the Seaway Hotel development agreement must go through the review process by the Community Development Board.
“While the conceptual documents are not inconsistent with Beach by Design,” Aiken said, “it doesn't mean that the Community Development Board will approve exactly this plan.”
At this point and three hours into the meeting, a third proposed development agreement came before the council.
Katie Cole of the law firm Hill Ward and Henderson, spoke on behalf of clients Ted and Maria Lenart, trustees of the Lenart Family Trust and owners of the Gulf View Hotel at 625 South Gulfview Blvd. They're seeking 69 units from the hotel density reserve for a 103-room hotel.
Cole told the council that her clients' goal is “to protect ... existing rights on the property as it exists today.” The owners also are “planning for the success of the family (business) by securing the density (rooms) and entitlements that are available to make a viable midsize hotel and to stay competitive with much of the development that is happening on south beach.”
Said the mayor, “Unfortunately, because of the size of the property, we're getting just another box, but at least we have some view corridors.”
The city council will discuss the Seaway and Gulf View hotel agreements during a second public hearing at 6 p.m. Nov. 7 in the city hall council chambers.
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