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Owners of mom-and-pop motels who want to sell find themselves stuck in paradise

It's a good life for the right person at the right time. When you own a small vacation motel, you are your own boss. Your office is a few yards from your home because you can live on the property. You work hard. Very hard. But you have repeat guests who become close friends over the years. And the sandy beaches and swaying palms that are vacation accessories to most are part of your everyday life.

Then comes the time when you're tired of working. You want to vacation somewhere other than the Gulf of Mexico. If you pay a management company to step in, there goes some or most of your profit. So you decide to sell. But then the economy sags, and there's an oil spill that leads to months of canceled reservations. Lenders and buyers are wary. So your little piece of paradise isn't moving.

Now you're stuck. Stuck in paradise.

There are more than 20 independently owned motels or inns on Pinellas beaches and in downtown Clearwater for sale. Prices range from about $500,000 to $4 million for properties with six to 40 rooms. Owners and real estate agents say interest has been sporadic and offers, if any, have been low.

"We've had bargain offers," said Alina Gosk, who owns John's Pass Beach Motel. Her son has gotten married and moved North so she and her husband don't want to be tied to the motel anymore.

"It's too much for us. My husband broke his leg. The bridge almost killed us," she said, referring to the four years it took to build the new John's Pass Bridge and the loss of business it caused.

The motel sits on the beach side of Gulf Boulevard with old-fashioned charm, including some units with screened porches

Steve Busse with Re/Max All Star in North Redington Beach is listing four independently owned beach motels, including Sand Glow Villas at 19328 Gulf Blvd. in Indian Shores.

"The biggest problem with any commercial property on the beach is the history. The buyers like two to three years of history, and the banks like two to three years of history," he said. "BP buried all my mom-and-pop hotels. When you have a huge hit like that, it dissuades the buyers from moving forward at what I consider a fair rate of sale."

The oil didn't blacken Pinellas beaches, of course, but the worry that it could triggered months of cancellations. Those vacancies cost mom-and-pop motels tens of thousands of dollars. That kind of balance sheet doesn't make for a strong bargaining tool.

Busse has had a couple of offers on properties that were 10 to 15 percent below the asking price, a difference of more than $100,000.

"When someone starts talking about a price of $1 million-plus, the buyers want to see a safe rate of return," he said.

Some properties are already heavily mortgaged, and low bids leave the owners with not even enough to pay them off, much less retire on. Busse said he knows of some properties that would qualify for commercial short sales.

"It's not going to get any better for a while," he said. "It's going to take some more time to rebuild confidence in the beach community."

The 29-room Summerside Inn in Clearwater is on the market for $1.1 million. It's financially sound, but the owners have decided to sell.

"It's been in our family for 60 some years," said Yvonne Silcox, whose grandfather built the Summerside in 1947. "My brothers and I never lived in a house. We lived in the second story of the middle building of our hotel." Her mother and uncle eventually took it over and now it's Silcox's turn. She and her husband have full-time professional jobs and don't want to raise their children at the tidy white block hotel with the kidney-shaped pool.

"I've told everybody who comes and looks at it that it's such a love-hate thing when you are raised there," she said. "I'd come home from school, there would be rooms waiting for me to clean. One of my brothers would clean the pool; the other one would clip bushes and mow the yard."

Yet motel life had advantages. Her cousins came and stayed every summer. It was the gathering point for holidays with 40 people or more congregating in their 2,000-square-foot home on the second floor and around the pool. She has maintained friendships for 30 years with guests who come every year.

"It makes the tough part so worthwhile when you meet these great people from all over the country," Silcox, 45, said.

The Summerside sits on 1.8 acres at 1477 S Fort Harrison Ave. The property includes the motel, several cottages and one 3,000-square-foot commercial building that houses a post office.

"It's in very good shape,'' said Jim Parker, the Colliers International agent listing the motel. "Part of that is due to the fact that the owners lived there."

He thinks an investor or developer could get a good price on it now, operate it three to five years and then redevelop the site.

The motel gets a lot of business from nearby hospitals that refer patients and their families from out of town. Though a manager is running the place now, Silcox is still there often enough to get to know guests. She sometimes finds herself as the familiar face they confide in about hopes and fears of hospital procedures.

"The day it sells it will be a bittersweet thing," she said, "because it's so much apart of our history, of our family."

To reach Katherine Snow Smith call (727) 893-8785 or e-mail kssmith@sptimes.com.

Owners of mom-and-pop motels who want to sell find themselves stuck in paradise 11/12/11 [Last modified: Saturday, November 12, 2011 3:31am]

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