Walesbilt Hotel Proposal Still Alive, Under Deadline to Avoid Suit
Commissioners Approve Legal Action If No Agreement Reached By January 28
Last updated 1/26/2022 at 4:59pm
A long-awaited proposal to redevelop the prominent former Walesbilt Hotel into a luxury full-service hotel and conference center is still viable, according to representatives of the development team, who pledged to keep working toward an agreement with the city that will assure the success of the project.
Citing "progress" but large remaining differences between the parties, the Lake Wales City Commission Tuesday night authorized legal action against Dixie Walesbilt, LLC while leaving the door open to further negotiations, with a deadline of noon on January 28. If no deal is signed and ratified by the Commission by that hour, the city's legal counsel will proceed to file the suit.
The lawsuit would "toll" the Statute of Repose, a necessity to avoid losing all recourse on the city's grant of title under the original agreement, which expires February 2. While that wouldn't signal the death of the deal, "It would cloud title" which could "pull financing off the table," the developer's financial representative, Daniel Greenberg, told commissioners.
Hotel owner Ray Brown, who received the title to the property on February 2, 2012, has arranged an "at the bell" financing package based upon a major "flag," or hotel brand, for the eleven-story building. He had been unable to bring forward a viable financing plan during prior years, which featured both the "Great Recession" and a brief economic boom.
While the February 2 date evokes images of the popular "Groundhog Day" film, commissioners are hoping that this time the seemingly-endless loop of delays will finally be broken.
In need of a multi-deck parking garage, developers asked that the city provide one, assisting in the purchase of the present Care Center Thrift Store property to accommodate it. That building would be turned into a conference center if the project moves forward as designed. The city's written response was a flat "no."
"That parking garage wasn't just for us," Greenberg said in response to criticism from Commissioner Robin Gibson. "It's in the city's development plan."
Dedicated parking is a clear requirement for the project to attract a flag such as Hilton or Marriott. A project representative indicated that the minimum acceptable number would be "about eighty spaces." A document provided to LakeWalesNews.Net by lenders states that a "flag" is a requirement for the financing.
In discussion during Tuesday's night's meeting, Mayor Eugene Fultz characterized the developer's demands as "holding the city hostage."
"If that word is inappropriate, then I apologize for using it," Fultz said.
Greenberg, representing Blue Chip Capital, responded that they were asked to provide a list of what they'd like to see in an agreement, indicating that it was somewhat of a wish-list. "I don't think we're as far apart as Commission Gibson has indicated," he said. Any incentives or inducements the city or Community Redevelopment Agency might provide could make the deal more financially attractive to lenders and assure its completion.
Financing of $9 million has been arranged for the hotel renovation, but the cost of the entire project could run "up to $20 million," Greenberg told Commissioners. He added that the financial impact to downtown Lake Wales would be "$100 million over four to five years. A million dollars (from the city) may sound like a lot" but put in that context, "it's really not that much."