UPDATE: Key Club’s joint venture with hotelier Ocean Properties could spell synergy
The Longboat Key Club at Islandside on the Gulf of Mexico.
STEVE REID
Editor & Publisher
sreid@lbknews.com
As the Longboat key News reported last Tuesday, The Longboat Key Club, owned and managed by Loeb Partners Realty based in New York City, entered into a joint venture with Ocean Properties, Ltd., a major hotel development and operating group, for an undisclosed sum.
But how the relationship works for each party and what some of the strategic advantages are for Ocean Properties become apparent when the holdings of the company locally as well as its redevelopment track record are considered.
The joint venture
Sarasota attorney John Patterson told Longboat Key News Tuesday, Aug. 1 that the contract is in the due diligence phase. Sources say the deal is likely to close by year-end and is not contingent on the outcome of the Islandside redevelopment rights, which are being challenged in court.
Ocean Properties already owns the Hilton Inn on Longboat Key as well as the Lido Beach Resort and the Holiday Inn on Lido Key.
Patterson said the agreement could spell an exciting new era for Longboat Key and its redevelopment.
“The strong and deep financial ties of Loeb along with the background and experience in luxury resort management and the assets in Ocean Properties can be a real win-win for everyone involved, especially the community. The marketing for Longboat and this area could be tremendous. Ocean Properties already has three properties here — this is major,” said Patterson.
Patterson is representing both Ocean Properties and the Key Club in their redevelopment efforts on Longboat Key and is thereby recused from representation in the agreement for the joint venture.
Patterson said one of the reasons there are not more details is due to the complexities and variables within most any due diligence in a joint venture.
Typically the party that comes into the relationship, in this case Ocean Properties, can walk away from the venture at any time in the due diligence phase.
Details of any eventual buyout or management agreement can change as development rights are granted or not accomplished or if market fundamentals shift.
Sarasota attorney John Patterson told Longboat Key News Tuesday, Aug. 1 that the contract is in the due diligence phase. Sources say the deal is likely to close by year-end and is not contingent on the outcome of the Islandside redevelopment rights, which are being challenged in court.
Ocean Properties already owns the Hilton Inn on Longboat Key as well as the Lido Beach Resort and the Holiday Inn on Lido Key.
John Patterson
Patterson said the agreement could spell an exciting new era for Longboat Key and its redevelopment.
“The strong and deep financial ties of Loeb along with the background and experience in luxury resort management and the assets in Ocean Properties can be a real win-win for everyone involved, especially the community. The marketing for Longboat and this area could be tremendous. Ocean Properties already has three properties here — this is major,” said Patterson.
Patterson is representing both Ocean Properties and the Key Club in their redevelopment efforts on Longboat Key and is thereby recused from representation in the agreement for the joint venture.
Patterson said one of the reasons there are not more details is due to the complexities and variables within most any due diligence in a joint venture.
Typically the party that comes into the relationship, in this case Ocean Properties, can walk away from the venture at any time in the due diligence phase.
Details of any eventual buyout or management agreement can change as development rights are granted or not accomplished or if market fundamentals shift.
A plus for Longboat Key
Both Mayor Jim Brown and Vice Mayor Dave Brenner said the news is a strong plus for Longboat Key.
“The fact that another company, a very strong company, looks at Longboat Key and is willing to invest and take some risk is a real compliment to the strength of Longboat Key and our community, ” said Mayor Brown.
Vice Mayor Dave Brenner
Vice Mayor Brenner said it bodes well for the island.
“Whatever Ocean Properties does, they do well,” Brenner said.
Brenner said he got to know Ocean Properties President Mark Walsh and Vice President of Operations Andy Berger years ago when the two were in the area looking at their other properties and then the economy started heading downhill. He said he and Andy stayed in touch and talked about the island and Mark and Andy were “enamored with Longboat Key.”
Brenner said they both wanted to know everything that is going on in Longboat.
“These guys do their homework and do their due diligence very carefully,” Brenner added.
After Brenner saw their apparent interest, he put them in touch with Attorney John Patterson and they hit it off.
When Brenner heard the news of the joint venture he said, “It surprised me and it did not surprise me — if that make sense.”
For Brenner, the fundamentals of Longboat Key are what works.
“The location, vis-à-vis Sarasota and the airport, driven by cultural and artistic endeavors is appealing. The Key itself is not overgrown and overdeveloped or glitzy. It has a charm and appeal a certain class of people want to live and come and own properties,” said Brenner.
Family owned
The family of its president, Michael Walsh, controls Ocean properties. The company was founded in the 1950s by Thomas T. Walsh, a former linen and bedding salesman from Bangor, Maine as a small family business with one hotel and since has grown into one of the largest privately held hotel operating and development groups in North America operating 107 hotels with 17,936 guestrooms. Today, the company is managed by Walsh and his five children: Mark, Mike, Patrick, Bill and Susan.
Ocean Properties is the largest hotel company in Florida operating more than 30 hotels across the State. The Company has corporate offices in Delray Beach, FL; Portsmouth, NH; Montreal, QC and Vancouver, BC.
Ocean Properties, Ltd & Affiliates purchased Atlific Hotels & Resorts, the largest independent hotel management company in Canada in 1997. Atlific operates hotels in Canada, from Halifax, Nova Scotia to Vancouver, British Columbia.
In addition to developing and managing hotels and resorts, Ocean Properties, Ltd & Affiliates develop and operate restaurants, spas, golf courses, commercial real estate, marina operations and boating tours, often on behalf of third party investors and lenders.
Whether Ocean Properties eventually acquires the Key Club in its entirety or ends up developing and/or managing the operation is to be seen.
The Longboat Key Club is comprised of more than 400 acres, 45 holes of golf, the golf and tennis courts and club assets as well as six restaurants, the 9,000 square–foot Island House Spa, meeting areas and the Inn on the Beach Hotel with 218 rooms. It is recognized as a AAA Four-Diamond Resort and the United States Tennis Association gave it the “Outstanding Facility Award” for its Tennis Gardens.
Both developer and management background
The Ocean Properties Website refers to the company as one that “is consistently chosen as the developer of choice when responding to RFP development and renovation opportunities. Our experience and ability to provide a complete turnkey partnership coupled with our strong franchise relationships allows us to carefully select the projects we partner with. The Company continuously seeks out and embarks on new hotel development opportunities.”
The Sagamore Hotel
As testimony to investment during the recession, Ocean Properties has made multimillion-dollar investments including the recent development of the 454-room Le Westin in Old Montreal and the acquisition, renovation and expansion of The Sagamore Resort at Lake George in Bolton Landing, New York.
The latest significant growth projects include the acquisition of the Sandpearl Resort in Clearwater Beach and the complete redevelopment of The Latham Hotel in Center City Philadelphia to become a modern, urban, boutique hotel.
The company is in the midst of opening third waterfront hotel in Bar Harbor, the West Street Hotel.
In addition to developing and managing hotels and resorts, Ocean Properties, Ltd & Affiliates develop restaurants, spas, golf courses, commercial real estate, marina operations and boating tours.
The Hilton deal
The Longboat Key Hilton
Earlier this year, Ocean Properties released its plans to give the Longboat Key Hilton Beachfront Resort a $25 million renovation.
“It’s a great location, with a great beach and a great area. The planned additional rooms with help meet market demands. The renovation will take things up a notch and make it a first-class resort destination,” said Ocean Properties Vice President of Operations Berger.
The plans include: a complete renovation of the largest structure, tearing down most of the remaining existing structures, building a new reception area, large water features, a large courtyard, new swimming pool, rooms angled to optimize waterfront views and a larger meeting space that would double its current size.
Ocean properties plans to ask from the Longboat key Town Commission for approximately 85 of the 250 tourist units that residents voted into existence in 2008.
It planned the renovation in 2009, however according to Berger, the recession stalled plans but a rebounding tourism industry has breathed new life into the plan. Demolition may begin as early as May 2013 with a planned renovation period of 10 to 12 months.
“The existing Longboat Key Hilton Beachfront Resort was designed by hotel architect John Nichols and now we have hired his firm almost 40 years later for redevelopment,” said Berger.
Nichols Brosch Wurst Wolfe & Associates architectural and planning services specializes in the design of hotels, resorts, condo/hotels, office buildings, retail and mixed-use projects throughout the United States. They are the designer also responsible for the Longboat Key Club & Resort’s Islandside redevelopment.
Ocean Properties Hotel List
Allowing one company to control all of the major resorts is not a win for resort patrons…….it is called monopoly…..you need competition.this deal eliminates it…..
These guys manage Days Inns and other motels. Not what the members had hoped for at all.
One of my predictions for 2012 that appeared in a December 2011 article:
3) Loeb Partners will sell the Key Club to a resort developer located either in Orlando or Phoenix. The new owners will propose a more modest and realistic expansion plan for the Key Club. The new owners will actually do something about the quality of play on the courses. The new owners will create an attractive club environment and improved operations that will attract new members.
http://lbk-folk.blogspot.com/2011/12/my-2012-predictions-for-longboat-key.html
SRQ is one of the major problems standing in the way of sustained long term growth of this area.
Since 2008, when Continental pulled out, it left a huge void with no direct flights from the New York area.
Not wanting to deal with the inconvenience, travelers will look elsewhere to travel.
Don’t know how to solve THE ongoing problem at SRQ – to paying customers – no flights.
The small private jet market is moving towards using social media to fill unused seats. Perhaps some sort of web app might enable people wanting to visit the area to book seats.
Private jets are able to work with lower costs and a more nimble reservation scheme.
Links to discussion about small jet travel:
http://travel.nytimes.com/2011/09/25/travel/fly-a-private-jet-at-public-prices.html?_r=0
http://www.terminalu.com/travel-news/fly-on-a-private-jet-for-150-with-social-flights/9550/
There is no easy fix for SRQ. We are simply too small a market, that carriers won’t service because they lose money.