Aug 17 2006
Vision 2010

Julian MacQueen’s Innisfree Hotels is undertaking one of the biggest waterfront development projects in Northwest Florida

by Shannon Lord in NW Florida’s Business Climate Magazine, August 2006.

When Julian MacQueen builds something, he makes sure astronauts can see it from space. MacQueen’s Vision 2010 will transform Pensacola Beach from a quiet, small beach town into a booming vista of high-rise condominium hotels complete with retail, dining, parking and the requisite boardwalk. MacQueen began building on Pensacola Beach when he bought the Sunset Lodge in 1994. He dreamed of turning the island into a resort destination that was a four-star experience,” he explains. The name of the project, Vision 2010, is a working title for the construction.

Broken down, it literally incorporates that the project will finish in 2010, and that the project is a vision MacQueen has for Pensacola Beach. In reality, the project, which consists of several new buildings and upgrade to existing ones, will not share one name. “I think that Pensacola Beach has already established enough brand equity that to rename a portion of the beach would be a mistake,” says MacQueen. “We need to trade on the equity, to leverage that equity and make sure that we are working in concert together with the public relations, marketing or advertising programs that the area established.” “There is a temptation to do that [name the complex] because we think that it’s going to be distinctive enough when it’s finished: we want it to have a sense of arrival that when you come into this area that Innisfree has developed, you will notice a big difference from where Pensacola Beach has been in the last 20, 40, 50 years.” “There are other examples up and down the coast where people have carved out their own identity, like Sandestin. But what you have to remember is that Sandestin is now 25 years old, and they all went bankrupt before they were successful. You know that old saying, ‘you can tell the pioneers by the arrows in their back?’ I mean, that’s the risk that you take in being too innovative or too progressive or too visionary-sometimes you can get ahead of the curve, and even though there’s a lot of support for an idea, the marketplace may not accept it as well as your friends, family and business associates who think it’s a great idea.”

Vision 2010 calls for upgrades to the existing Hilton Garden and Hampton Inns, a 17-story tower adjacent to the Hilton, another 17-story tower on the former Beachside Resort Property, two 15-story towers, a boardwalk, and a marina. The construction will be done in phases, to gauge what the market will handle. “If the market accepts the new Beachside Resort, then we’ll start the two towers while we’re finishing up the Beachside so that we have a continual expansion going on. The marina is a part of the two towers, which have a parking garage and sound front colonnade with small boutiques, restaurants and retail shops fronting the boardwalk,” declares MacQueen. And he should know. Working his way up the food chain, MacQueen began working in the hotel industry at 15 as a busboy. “I know every job [in the hotel industry] because I’ve worked every position,” he says. “So, I have tremendous sympathy for people that work for me. I can be there where they are, I think, even though I own and run the company. I appreciate what everybody does, and that appreciation shows.” Perhaps it is that appreciation that has created an excellent working environment at his company, Innisfree, and as every businessperson knows, a happy staff makes for good business. After the success of the Beachside Resort, MacQueen continued to develop on the beach, purchasing the locally famous Surf n’ Sand. At first, Pensacola residents weren’t thrilled about the changes MacQueen was making to the beach. “There was a lot of support for keeping Surf n’ Sand cottages the way they were. Cinder block cottages were the way people wanted to remember the beach. I like to say, everybody has done something illicit in Surf n’ Sand cottages,” laughs MacQueen. “Everybody would go there and party either when they were naval aviators or high school seniors. I would tell people that I bought Surf n’ Sand cottages and their eyes would kind of glaze over and they’d go, ‘oh, we had the greatest time there.’ People get very nostalgic, and as a culture we’re very closed to accepting change, and we’re very traditional, and I think that’s part of the charm of being a Southerner and a part of the challenge of being a Southerner.

The traditions that we hold close to our hearts are very important to keep us who we are, but at the same time I think there’s room for improvement,” he contends. “I’m from Birmingham, AL, and you can’t get any more Southern than that. I love the South: I love that I’m from Alabama, and I love the fact that our cultural background is very genteel and hospitable. That’s something that I try to emulate in my hotel. I have to take those qualities and keep them in place while we move forward.” So, he moved forward with the purchase of the Surf n’ Sand and the construction of the Hilton Garden Inn. When he couldn’t find financing for the project in Pensacola, MacQueen traversed the country to find the money, finally meeting with the right banker, David Dyer, President of Empire Financial in Milledgeville, GA. Dyer’s bank loaned Innisfree the money for the Hilton, largely based on faith. Since no four-star, destination hotels had been built on Pensacola Beach at that time, Innisfree had no business model precedent to prove to Dyer that his investment would be a worthwhile one. “We purported something called Induced Demand: we did six feasibility studies. Induced Demand is another way of saying ‘Build It and They Will Come.’ So, that is a very difficult business plan to sell. It requires a lot of faith. I put everything I had into this because I believed in Induced Demand. I believed that if Pensacola had a four-star facility, that all this traffic - everybody that came into Pensacola airport and spent an hour driving east to Destin and West to Gulf Shores - that if we built something here that they could get to in 20 minutes, that they would actually stay.” That’s what he told Dyer, and he turned out to be right. So right that Dyer is again financing the next phase of MacQueen’s Vision 2010, the Towers condo-hotel next to the Hilton Garden Inn. “We of course had done other things with Julian in other locations and hold him in high regard,” says Dyer. “We did the original construction on the Hilton Garden Inn and had a very positive experience, and for that reason, were willing to go forward with the expansion. “Occupancy has been excellent since inception [of Hilton Garden Inn]. A need was there [for further hotel construction]. We had some third party verification of demand. A lot of hotels have been torn down to make way for condominiums, so there is somewhat a scarcity of hotels; some people want to stay in a place with full service rather than a condo which, frankly, confirmed the necessity of the project,” he reasons. With the Hilton, “I’ve proven there is a market for a destination resort, and I understand better what the price point is for our market,” confirms MacQueen. “So, as we go forward, I’ve got some real economic fundamentals to go on rather than some study that acted on the theory of what I was doing. After all, we have 21 acres in the core area, the superior real estate on Pensacola Beach.