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New beach condo binge worries tourism leaders

Mom-and-pop hotels are being bulldozed for pricey condos so quickly in Pinellas County beach towns that tourism industry leaders have created a plan to retain visitors after their familiar old winter haunt disappears.

Longtime regulars will get a letter, brochures touting other small Pinellas beach properties with low rates and followup phone calls from the St. Petersburg/Clearwater Area Convention and Visitors Bureau. But all of that can happen only if the former motel owner tells the bureau the names of its regulars.

"I don't want to lose any of these visitors to other counties," said Carole Ketterhagen, bureau director. She said her worst dream is a retired couple arriving for their annual month in Florida only to find their favorite old beach motel turned into $500,000 condos.

The binge in building luxury beach condos has alarmed tourism industry leaders and elected officials in several beach cities. The county Tourist Development Council got into the act Wednesday, hearing reports about the latest fallout from development rules that its members think have blocked new hotel construction along the beaches, their industry's big drawing card. While a group of beach mayors and chambers of commerce study the development rules and tally the conversions, they acknowledge it's probably too late to stop the latest trend before thousands of hotel rooms vanish from the inventory of the local tourist industry.

"It's gotten scary," said Debbie Stambaugh, chief executive of the Tampa Bay Beaches Chamber of Commerce. "I know of four condo conversions in St. Pete Beach alone. Madeira Beach is going to lose the Holiday Inn to condo developers. That's the last major hotel in the whole city."

Clearwater city officials estimate that 835 rooms in small mom-and-pop hotels are about to disappear from Clearwater Beach alone in projects under construction or under contract or motels being marketed for sale. That's about 300,000 room nights a year (rooms occupied multiplied by the number of nights they're full) or the equivalent of losing two hotels the size of the Adam's Mark.

About two-thirds of the 38,000 transient rental units in Pinellas County are on the beaches.

"We've got an overheated condo market, yet we hear about new contracts being signed for small hotels almost every day," said Ralph Stone, a Clearwater assistant city manager who is steering that city's ambitious beach redevelopment program. "It looks now like Brightwater Drive is just about gone" to condo developers. Brightwater Drive is a finger fill in Clearwater Bay that is lined with about 20 small hotels, many of them under contract for sale.

Not that the hotel clusters that are disappearing were universally admired for their features or their appearance. Most are a hodgepodge of 1950s vintage motor courts. The rooms are substandard in size, and maintenance frequently has been performed by amateurs. Many have parking lots that force guests to back into the street. The minimal landscaping survives in a sea of asphalt.

But tourism marketers had long hoped that hotel developers would assemble a number of the aging properties to create major destination resorts.

County efforts initiated three years ago to beautify the beaches so far have yielded only minimal results. Except for Clearwater Beach, proposals to rewrite redevelopment rules to stimulate new hotel construction got nowhere.

Nor are most of the new condos what many tourist industry leaders envisioned for redevelopment.

Instead of flashy, modern towers, the condos are typically two- or three-story townhouses that hunker down on the waterfront. Landscaping is minimal. Prices start at about $400,000. Ownership is frequently absentee.

"What's happened in Clearwater Beach is just as bad all the way down the beaches to St. Pete Beach," said J.J. Beyrouti, a small motel owner who is also the mayor of Redington Shores and member of the county Tourist Development Council. "We have to educate people of the economic sense of having a healthy tourist industry."

The volume of hotel teardowns is surging now because low interest rates, soaring condo prices and developers with ready cash are offering owners an exit strategy. In many cases speculators have bought small hotels with the sole intention of selling again.

Tourist industry leaders fear the loss of hotel rooms because condos are less likely to be rented by their owners by the day, week or month. Also, the condos appeal only to leisure travelers rather than business travelers or groups drawn to events, conventions or gatherings of special interest associations.

Still, it's estimated that more than 10,000 condos in Pinellas are rented to vacationers who pay the same 4 percent resort tax as is collected on hotel bills.

"I'd say half the owners in the new Tides Beach Club condominium rent even though the minimum rental there is for a month," said Connie Jessup, president of JC Resorts, a North Redington Beach company that specializes in condo rentals. "I just rented a $700,000 condo in Madeira Beach for five months at $3,500 a month."

_ Mark Albright can be reached at albrightsptimes.com or (727) 893-8252.

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