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Tradewinds cancels plans for new hotel in St. Pete Beach

 
The Tradewinds has decided to cancel plans for a new $55-million hotel because of construction costs.
The Tradewinds has decided to cancel plans for a new $55-million hotel because of construction costs.
Published Dec. 11, 2018

ST. PETE BEACH — The proposed $55 million, 12-story Sugar Sands hotel and parking garage will no longer be built here because of escalating construction costs.

The cancellation of the project also affects expected improvements to the city's sewer system along Gulf Boulevard that are required for any new hotel development.

Tradewinds CEO Tim Bogott recently notified the city that a development agreement with the city to build the new Sugar Sands hotel was being cancelled.

The hotel would have been built on the site of the former Coral Reef hotel, adjacent to the TradeWinds, condemned by the city, demolished, and purchased in 2014 by the Tradewinds for $9.5 million.

The city approved the development project two years ago but it was delayed because of a lawsuit filed by Jim Anderson, whose prior legal actions had blocked future development unless capacity in the city's sewer system was expanded.

Anderson and the TradeWinds settled their lawsuit in June and the Sugar Sands project was cleared to proceed, including Bogott's pledge to the city to lead a group of city hoteliers to pay approximately $6 million to repair and increase capacity of sewer lines along Gulf Boulevard.

That effort never began because, Bogott said, "There was no point after we got bids for the hotel project. We can't justify spending $6 million with no project to help pay for it."

A 35 percent hike in construction costs made the hotel project unfeasible.

"We still hope to do it some day if things make financial sense again," Bogott said.

The hotel would have been the first new hotel in the city since 1999 when the Sirata expanded.

Meanwhile, the 3 acres of prime gulf-front property will continue to be used for TradeWinds employee parking.

Despite this setback, the TradeWinds is continuing its $13 million renovation of both its 585- room Island Grand and 211-room Guy Harvey Outpost hotels, scheduled to be completed in phases over the next two years.

The project includes new furniture, new carpeting, and upgraded bathrooms in all rooms, as well as new balconies in some of the Guy Harvey beachfront rooms.

The renovation will not expand the number of rooms at either hotel, however.

Because of city's overburdened sewer system, which occasionally leaks onto city streets, there is an effective moratorium on new hotel development in St. Pete Beach.

Bogott and city officials had hoped the Sugar Sands development plan's side agreement to help improve the sewer system would reinvigorate hotel development.

Currently, the city sewer system has virtually zero capacity to handle any additional sewage along "hotel row" on Gulf Boulevard south of 64th Avenue, according to a consultant study conducted two years ago.

In 2016, the city estimated it would need about $14 million to repair its sewer system.

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Last year, the city spent $5.2 million on sewer system rehabilitation and expects to spend another $3 million in the coming year.

Millions more are needed to completely repair and further expand the city's sewer system sufficiently to allow new development.