Aug 17 2006
Constructing the Future

New developments changing look of our coastline

by Derek Pivnick in the Pensacola News Journal, July 2006

High-rises will continue to sprout up on Pensacola Beach over the next several years, supplanting the old-time character of the beach with shimmering new developments. Limited land and escalating prices are forcing developers to reach for higher density – and taller buildings – as they begin their projects. Gone are the days of the one or two story motels on the beach, where visitors parked in front of their rooms. Enter the era of high-class, high-rise resort. The evolution is leaving behind Pensacola Beach’s image of a sleepy waterfront village with plentiful beach vistas, a few gritty bars and cinder block motels and cottages.

The question is: After all the construction dust settles, will Pensacola Beach resemble Destin and Panama City Beach, with their walls of high-rises and limited beach access, or will it keep some of its old school charm? “The one thing that’s constant is change, and Pensacola Beach is changing,” said beach leaseholder Stan Potts, who first moved to Pensacola Beach in 1979. “It’s kind of a fact of life.” The beach can more than double the number of hotel rooms from its pre-Hurricane Ivan level, to nearly 2,400 rooms. That number could balloon to more than 3,900 rooms if builders receive exceptions to increase their allowable density. However, minimum room sizes, parking and drainage requirements, among other issues, could make reaching that maximum number unlikely.

The hunger for more hotel rooms has been made acute by the scarcity of rooms since Ivan thrashed the beach on September 16, 2004. Half the beach’s hotels remain out of commission. When the beach finally regains its full, pre-Ivan complement of rooms, it will no longer resemble the place it did before the storm. Some landmark hotels were damaged beyond repair and were razed. In their place will go newer, bigger buildings better able to withstand the awesome forces of nature periodically unleashed onto the beach. Clarion Suites lost its 86-room hotel on Pensacola Beach. The owners have received permission to increase density to 50 units an acre for a maximum of 216 rooms. It can build a 20-story hotel on 4.3 acres but has not submitted plans to the Santa Rosa Island Authority. The 153-room Holiday Inn is gone. In its place could go a planned 620-room, Caribbean-style resort to be built in three phases. It includes a 14-story tower on the Gulf of Mexico with a water park north of Fort Pickens Road, on Little Sabine Bay. Conceptual plans recently were approved by the SRIA. The Five Flags Inn property is for sale, putting its 4.2 acres on the Gulf in play. Hotel builder Julian MacQueen anticipates that the old hotels like the Five Flags Inn – once the Pensacola Beach standard – will give way to higher-end establishments. He opened the $26 million Hilton Garden Inn in 2003 and is banking that he can up the ante with a hotel/condominium tower under construction and plans for three more. MacQueen recalls one of the first properties he acquired on the beach had a prominently placed handmade sign stating the establishment didn’t meet state fire codes. He described it as a biker bar with a hotel in back. “The core business here was selling draft beer,” MacQueen said. That’s a part of the beach that Potts, 48, hates to see disappear, but he’s not clinging to it. “We’ve been discovered, that’s all that is,” he said. MacQueen notes that even though things have changed, it’s not all wine and sushi on the beach now. Draft beer and chicken wings still are available in some beach venues; it’s just that the overall menu has expanded. “It’s a different kind of experience,” MacQueen said. Apparently, it’s also a money maker. Basic economics meant that when the beach started generating big bucks, small operators had a difficult time competing. That was bad news for mom-and-pop operations but good news for developers with deep pockets. MacQueen has just finished the eighth floor of The Towers, a $44 million, 17 story hotel/condominium project adjacent to his Hilton Garden Inn that already has sold out. When it’s complete, it will be the tallest hotel on the beach. He also has approval for an 18-story hotel/condominium just to the east and two 15 story buildings and a marina to the north on Santa Rosa Sound. Twenty stories is as high a building can go in the commercial core area, a height limitation imposed because of the proximity of military and commercial air traffic.

By contrast, Orange Beach, Ala., which had a 14-story height limit, soon will be home to a $110 million condo project with a 32-story tower. “This is nothing new,” MacQueen said of his announced building plans. “This is just people finally stepping up and executing what was approved many years ago.” It was part of the beach’s original master plan to have a core commercial district in which high-rise hotels and condominiums could be built, Island Authority board members say. They are just carrying out that vision. SRIA board Chairman Thom Blas described the building heights as “medium-rise,” not high-rise. “Early planners laid the groundwork for this development to occur,” Blas said. “My understanding is historically, this was the plan.” It doesn’t mean the beach will become a wall of hotels and condos. Of the 1,474 acres of Santa Rosa Island controlled by Escambia County through the Island Authority, about 77 acres are approved for hotel development – a little more than 5 percent of the total acreage. By contrast, more than 600 acres are reserved for preservation, conservation, recreation and beaches. That’s an addition to the 1,742 acres of Gulf Islands National Seashore land preserved to the west of Pensacola Beach toward Fort Pickens and the 1,598 acres of National Seashore that will remain undeveloped to the east. Pensacola Beach is 8.2 miles long, wedged between 15 miles of federally protected land. Hotels are built along a central stretch a little more than a mile long. That could be what differentiates it from vacation destinations such as Destin, Panama City Beach or Orange Beach. “You can complain about the development, but if you look at the larger image of Santa Rosa Island it is a very, very small percentage that is being developed,” said SRIA board member and 40 year beach resident Bill Griffith. “To the extent that we promote usage of the beach on both sides of the island, you’ll not see that in all of Northwest Florida or anywhere else on the Gulf Coast.” Because Pensacola Beach is hemmed in by federal parks, it would take an act of Congress – literally – to extend the area of beach on which new homes, condominiums or hotels could be built.

By comparison, it would be easier to increase the county-controlled beach’s building caps, which the county is attempting to do for Perdido Key condominiums. But even that is no small task. It requires several public hearings, approval from the Florida Department of Community Affairs and a growth management plan amendment to bring about the change. Blas said as long as he’s on the Island Authority, he will oppose any attempt to uncork any of the beach’s current limits. Pensacola Beach has reached its limit for condominiums. In the past 10 years, at least a half-dozen high-rise condos have been erected. Two large ones are under construction. But the allowable 4,128 units have been allotted. That leaves hotels to fuel the next building boom. Hotels extend east and west from the intersection of Via De Luna and Fort Pickens Road. With about 5 percent of the total acreage on Pensacola Beach dedicated to hotels, it’s helping fuel the exploding cost of property. “We’re built out now, essentially,” Griffith said. “There are not any major pieces of property any more.” The 4.2 acres on which the Five Flags Inn was built is on the market for $21 million. “When the real estate gets so valuable, you have to get some density in there to make it work,” said economist Rick Harper, director of the Haas Center for Business Research and Economic Development at the University of West Florida. “I think it’s good to see developers take that kind of interest in Pensacola Beach.” Harper estimated MacQueen’s announcement of 700-plus additional rooms to the beach over the next several years and the 620-room resort, when they come to fruition, could add 10 percent in nonlodging expenditures by tourists to the $1 billion-a-year local tourism industry. “People who spend more money on lodging also spend more on items such as dining, shopping and entertainment,” Harper said. “What people in this area want us to be is a destination resort,” Blas said. “The new hotel rooms are a golden opportunity for us.” Realtor and small hotel owner Fred Simmons sees tremendous potential on the beach in the next five to 10 years, especially if a boardwalk that ties together the commercial core area is constructed. He said now is an excellent buying opportunity on the beach. Simmons is so confident, he’s snapping up Gulf-front lots with single-family homes on them, paying as much as $19,000 a linear foot for 100-foot lots. That’s a bargain compared to the $60,000 a linear foot for some Gulf-front property in Destin, Simmons said. Simmons has seen the changes and doesn’t really complain about them. “There’s not a lot of the old Florida,” he said. “It’s gone.”