CLEARWATER — On the morning of Oct. 1, consultant Joe Burdette sent an email to the city stating his developer client Dustin DeNunzio was withdrawing his application to build a 110-unit hotel on the site of the Palm Pavilion Inn on Clearwater Beach.
DeNunzio could not come to terms with the Palm Pavilion owners, which includes City Council member Hoyt Hamilton and his brothers, so they had called off the project.
In his email, Burdette asked Planning and Development Director Michael Delk to release the last 35 units in the hotel density reserve that had been pending since DeNunzio applied for them almost a year earlier.
On the same day, Burdette's other client, Jeffrey Keierleber, applied for 27 units from the hotel density reserve to build a 60-room hotel on the site of his current 27-room Chart House hotel on the south end of Clearwater Beach. Keierleber's application was submitted by attorney Brian Aungst Jr., who noted that enough density units were available with the withdrawal of DeNunzio's application.
Hamilton said he simply opted not to sell his family's inn and nearby restaurant to DeNunzio and had no connection to the next application that came up for the hotel density reserve. So on Feb. 7, Hamilton was one of three City Council members who voted to grant Keierleber the 27 units from the density pool he needed for the project.
But now Clearwater Point resident Rudolph Michalek, who helped lead the surrounding condo owners' initial protest of the Chart House project, alleged in a formal complaint with the city on March 7 that Hamilton's vote was a conflict of interest. And resident Ilana Wechsler on March 8 filed a request in Pinellas Circuit Court for a judge to grant an injunction against the redevelopment because of the alleged conflict.
After her initial review, City Attorney Pam Akin said she had not identified a conflict because there is no evidence Hamilton benefited financially from his vote.
Hamilton said neither he nor anyone in his family gained financially from Keierleber's Chart House project receiving hotel density units. Hamilton said his family decided not to sell their Palm Pavilion Inn and nearby restaurant to DeNunzio when they couldn't agree on a sale price, so they actually lost money by calling off the deal.
"They don't like the decision, so they're trying to throw anything they can against the wall to see if something will stick," Hamilton said of the residents' complaints. "Everything was done above board."
DeNunzio, who owns a small property adjacent to the Palm Pavilion Inn, confirmed he walked away from the deal with the Hamiltons in fall of 2018. DeNunzio and Keierleber both confirmed Burdette was working for them on Oct. 1 and handling their respective applications.
Because the city is not legally required to advertise density units as they become available, Burdette said it is the responsibility of property owners and developers to stay informed.
"Everybody on the beach who knows anything about the beach knows what everybody else is doing, you know where all the units are or you're an idiot, you're not a professional," said Burdette, one of the most known business developers on Clearwater Beach. "You can call the city at any time, any day, and say 'what's in the reserve?'"
The city created the hotel density reserve in 2008 as an incentive of 1,385 extra rooms that mid-sized hotels could draw from to build up to 150 rooms per acre, up from the former 50 per-acre maximum.
Since then, seven projects have been built using 463 units. Another 887 units have been approved by the City Council for 11 hotels that are not yet completed. That left 35 units up for grabs when DeNunzio was in talks with the Hamiltons in 2017 for his project.
DeNunzio applied for the 35 units from the reserve on Nov. 30, 2017. Although the 35 units had since been listed as pending in the city's log, Delk said DeNunzio's application was incomplete and it never advanced to the City Council for official approval.
No other developer applied for density units until Keierleber's Oct. 1 application. Delk said it is likely Keierleber's application would have been processed even if DeNunzio's application had not been withdrawn since it was incomplete.
Since 2013, 94 hotel units that had been approved by the City Council for three different projects have been returned to the reserve when the developments fell through.
Delk said because of the fluctuation, property owners, developers and business people stay in touch with the status of the reserve.
"It's a small group," Delk said. "Everybody pretty well at any given point in time knows what's what with the hotel density reserve in terms of who may build, who may not build."
But he acknowledged the Chart House project has touched a nerve.
When residents in the Clearwater Point neighborhood of eight condos learned in December about the proposal to rebuild the four-story Chart House into eight stories, they started organizing.
Hundreds signed a petition, others met with City Council members. Michalek said about 80 percent of the 465 families chipped-in to a hire an attorney, who represented their case at two council meetings.
"This is really a residential neighborhood, and making it into essentially a hotel tourist area is just not appropriate for the area," Michalek said.
Residents complained that noise, traffic and the height from the expansion would disrupt their serene neighborhood. Keierleber, who's owned Chart House for 27 years, said he wants to continue to be a good neighbor, so he agreed in writing the redeveloped hotel would not have a restaurant, bar or amplified music.
The Chart House property is zoned for tourist use, but Michalek alleges the City Council went against their own Beach By Design redevelopment plan because of the nature of the surrounding area.
"One could say by zoning it's tourist, but if you look at the use … it's essentially surrounded by condominiums," Michalek said.
Hamilton said not only was the Chart House approval appropriate, but that his vote was free of conflict. In response to his name "being dragged through the mud," Hamilton said his "options are open" for his next steps.
"I know I've done nothing wrong, I take great pride in how I do my job on the Council," Hamilton said. "I make sure I don't have any conflicts. I do my due diligence."
Contact Tracey McManus at email@example.com or (727) 445-4151. Follow @TroMcManus.