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All those beach condos, but still no place to go

The boom in upscale residences is shutting out tourists interested in moderately priced lodging.

By MARK ALBRIGHT
Published March 5, 2006

This is the 46th winter that Rita Long is spending in Pinellas County. But the 67-year-old retiree hopes that she won't be priced out yet again by the relentless spread of condominiums.

Gulf Boulevard was two lanes when her family checked into the first of a series of St. Pete Beach hotels, where they retreated from winter's cold in Terre Haute, Ind. By 1980, beach condo booms had wiped out enough moderately priced seasonal rentals that Long bought an RV and moved inland. Each year she spent four months at the Holiday Campground in Seminole, waiting for spring to arrive. But the campground was leveled for a condo four years ago, forcing her farther inland to a mobile home park near U.S. 19 in Pinellas Park.

"If I am forced out of this place, I just won't come back to Florida," she said before a Friday reunion of about 100 other snowbirds scattered by the same campground closing. "It's sad. I come here for the beaches, the sunsets, the charming little seafood restaurants. That's not what's here anymore. Pinellas is becoming all high-priced condos, malls and traffic congestion like the East Coast."

As the peak winter season swings into prime-time this week, it's off to a slow but steady start for the big hotels due to a warm January up north, a late Easter and higher energy prices. But the owners of moderately priced hotels away from the gulf say business is booming with visitors priced out of the beaches. And try to find a spot in the all-but-extinct mom and pop beach motels or the dwindling inventory of recreational vehicle or mobile home parks.

"There's nothing left in the mid to budget range," said Tony DeGeorge, a Clearwater hotel broker.

The vision of the ramshackle working class retreat portrayed in Summer Rental, a 1985 John Candy comedy filmed on the Pinellas beaches in 10 days, is about to fade into history.

In 2001, the average household income of a Pinellas County tourist was $75,000. As more low-priced properties were leveled, that jumped to $105,000 for the last three months of 2005. The average income will go even higher as more budget-priced motels disappear, said Walter Klages, president of Research Data Servces, which tracks Pinellas tourism.

Now the beach tourism industry that advertised affordable family vacations for 25 years must lift its sights to wealthier travelers.

"A lot of Canadian snowbirds say Pinellas is getting too expensive, so they are moving inland to places like Bradenton, Lakeland and Orlando," said Gerry Brissenden, president of the Canadian Snowbird Association.

It's all part of a dramatic transformation of the Pinellas beaches and the county's $3.5-billion tourist industry - triggered by another condo craze.

The effects of new condos and city-sponsored hotel redevelopment in Clearwater Beach are rippling through a variety of beach commerce this winter. It has unleashed pitched zoning battles and debates in city halls, where businesses and homeowners wrestle over whether their town should end up looking like the retail-sparse condo canyons of Sand Key or the phalanx of squat five-story condos lining Gulf Boulevard in Madeira Beach.

In St. Pete Beach, where studies show tourists spend six times as much as condo owners, a new city master plan aimed at slowing the condo developers and providing zoning incentives for hotel development along a 1-mile stretch of the beach turned into a political football. After a year of wrangling, a petition drive to force a citywide vote on any changes to the proposed plan once it's adopted was stalled after a court battle. But the outcome remains in limbo.

To city officials it's a matter of offering flexible development rules to make the city's big hotels economically sustainable before someone turns them into condos.

"What's on the line isn't whether we have hotels, but what our city will be for the next 30 years," said Harry Metz, a leader of the petition drive.

Pinellas lost about 5,000 of the least expensive rooms in its 38,000 transient lodging inventory to condo developers since 2001. And condo developers are still offering owners $3-million to $4-million an acre for gulffront property - more for strategically located smaller parcels - that was going for about $1-million five years ago.

"The impact of all this new condo development is going to be huge, so we expect a couple of difficult years while this all sorts out," said Wit Tuttel, spokesman for the St. Petersburg/Clearwater Area Convention and Visitors Bureau. "We're essentially losing the (traditional hotels) in the mid beaches. It's basically going to be St. Pete Beach and Clearwater. So we have to figure out how to present our marketing message to a very different, more affluent audience."

"The changes I've seen on the beaches the last 24 years are unbelievable," said Mary Lois Harrison, who owns Victoria Apartments, one of 10 small motels left in Indian Shores. "But nothing was as drastic as the last five."

Many mom and pops, which sit on a gold mine in real estate, used the latest condo binge as an exit strategy. But even those trying to make a go of it say soaring property taxes and insurance bills are hastening their demise.

"I've turned away 70 percent of the people who call because they cannot afford to stay here," said Mary Wilkerson, owner of Sarah's Seaside in Indian Rocks Beach, who is organizing a beach business tax revolt. "I've only got eight units here, but I'm zoned for 16. So I pay taxes as if I'm a 16-unit condo."

While it's hard to find peak season lodging below $100 a night on the beach, it's there.

After paying rising rates eight years, Susan Downard of Rennselear, Ind., finally scored a beach cottage for less than $100 a night for an upcoming vacation.

"But I'm not going to say where because someone will try to take it away," she said.

She booked the cottage she has yet to see for 2007, too.

To be sure, the number of seasonal residents who own is on the rise. Progress Energy Corp. said seasonal power hookups are up 5 percent across Florida, and 3.5 percent over 2004 in Pinellas County. But seasonal renters who stay a month or more fell below the pace of 2005 because of the price squeeze, according to preliminary figures compiled for the visitors bureau.

The beach condo booms of the 1970s and 1980s each lasted three years before developers built too far ahead of demand. Unit owners of about 10,000 of those condos make up almost a third of today's transient lodging inventory. They typically rent by the week at around $1,600 a week for two bedrooms on the beach, and $1,500 across Gulf Boulevard, according to JC Resorts and Jack Collins Rentals.

Even with the best exchange rate in decades, however, most Canadian snowbirds will only budget $1,500 or less a month for lodging, said Brissenden of the Canadian Snowbird Association.

The travel industry doubts many tourists will rent the new crop of $1-million and up condos. More likely, owners will leave them empty most of the year.

Enter the so-called condo-tel, condos that get more permissive zoning density if some of their investor-owned units are operated like hotels. Unit owners put their condos in a new type of rental pool. It has become the new way to rent luxury condos equipped with extras like granite counter kitchens and resort amenities such as spas and marinas. Unlike the older waves of condos, these can be rented be the day.

"We bring a hotel mentality to renting condos," said Steven Rodriguez, director of Travel Resort Services, which will market luxury condo-tel units to tour operators and through online travel Web sites. Typically, a luxury two-bedroom condo goes for about $300 a day in peak season, the price range of the Don CeSar Beach Resort.

Travel Resort Services already manages 800 condo-tels in Pinellas. It has deals for 1,000 more that are under construction, and the company projects 1,000 more in 2007.

Many beach cities encouraged the condo boom and redevelopment because they considered their beach tourist product dated, economically obsolete and deteriorated. Prodding developers to action were favorable development codes and taxpayer-subsidized upgrades of competing tourist beach destinations and their hotels in Daytona Beach, Fort Lauderdale, Hollywood and, most recently, Panama City.

The ramifications are playing out in many other tourist-reliant businesses in Pinellas. Landmark waterfront restaurants such as Leverock's, Chateau Madrid and the Hungry Fisherman have been sold for condo projects. Britt's Laguna Grill in Clearwater Beach closes when the hotel it's in is leveled in May for a condo and the owner shifts his business down the street to a building he already owns.

Popular Dockside Dave's in Madeira Beach was forced out of the Charter Boat Center in December when a deal collapsed to put the seafood restaurant in a condo rising in its parking lot. The restaurant scrambled to reopen in John's Pass Village.

Many businesses are adapting to a new population mix.

With 12 condo conversions under construction in Treasure Island, the owners of Robby's Pancake House stopped serving breakfast after 35 years. The restaurant is morphing into Middle Grounds Steak and Seafood. Its little ice cream shop may become a cafe-cigar bar.

"People who live in condos cook their own breakfast, but go out for dinner," said Dave Coover Jr., whose family owns the place. "Plus the cost of doing business here looks better if you're serving $20 to $25 dinners rather than $7 breakfasts."

Tourist trinket shops are downsizing. Forever Florida in Treasure Island closed one of two stores and marked prices down 50 percent last week. In St. Pete Beach, Gulf Boulevard is lined with aging strip centers full of merchants who get up to 60 percent of their business from tourists.

City Manager Mike Bonfield said, "A lot of them have told us they will go out of business if the city loses 10 to 15 percent of its tourist traffic."

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

[Last modified March 5, 2006, 00:54:10]