CLEARWATER BEACH- A new Hyatt resort may be built on the site formerly known as the Seashell Resort on Clearwater Beach, but not before the City makes a commitment to construct the Beach Walk improvements on South Beach. That was the message delivered by Michael Shindler, Senior VP of Development for the Hyatt Corporation, to the Clearwater City Council during their meeting on Monday August 17; the Council responded by committing $15 million to fund the 3 1/2-year construction project.
The Beach Walk project was identified in Beach by Design, Clearwater's master plan for beach redevelopment, as both an attractive public amenity and a lure for resort hotel development on South Beach. Now, having succeeded in attracting a flag hotel promising 4-star quality, the City had to find the money to construct the curvilinear South Gulfview Boulevard, widened Coronado Avenue, and pedestrian facilities.
The City has two pending Federal Appropriation requests for Beach Walk totaling $7 million; those funds are not likely to be appropriated in a single year, but the City is hopeful that a significant portion will be awarded over several years. So how could Clearwater find the funds necessary to begin construction in April 2005? Enter Margie Simmons, Clearwater's Finance Director, with not one, but eleven answers.
In addition to the $2.5 million already on hand, Simmons identified eleven additional funding sources to finance the project. To preserve eligibility for the Federal funds, Simmons decided to provide those $7 million now in the form of interfund loans within the City, $3.5 million from Solid Waste Fund, $1.5 million from the Special Development Fund, and $2 million from the General Fund that had already been reserved as part of the Seashell development agreement.
The remaining funds consist of a $1 million transfer from the Special Development Fund, nearly $2 million from the Streets, Sidewalks and Bridges Fund, $780 thousand of utility funds, a $500 thousand grant and, significantly, a $1.2 million contribution from the resort developer.
Construction of Beach Walk will result in a loss of 376 city parking spaces. While the resort promises to provide 400 public parking spaces, the parking revenue belongs to the resort, leaving the City with an annual net loss of parking income of $730 thousand. Those funds have been used to pay a portion of the beach lifeguard program, beach cleaning, and subsidize the Jolley Trolley. Simmons suggested that increasing city parking rates by about 20%, reducing services, or levying a special assessment on beach businesses could cover the parking revenue shortfall.
The construction of Beach Walk also creates some uncertainty for the South Beach Pavilion's beach rental business. An RFP for a 10-year operating contract for the facility has been scheduled for release on October 1, but the Seashell development agreement gives the resort exclusive rights for beach chair and umbrella rentals in front of its property, an area that today is serviced by the South Beach Pavilion. Harbormaster Bill Morris has requested direction from the City Council for the South Beach Pavilion RFP, and proposed that the Seashell development agreement be renegotiated to eliminate its beach rental rights.
Mahshid Arasteh, Clearwater's Public Works Administrator, described a three-phase Beach Walk construction project that could begin as early as April 2005 and last 3 1/2 years. The first phase, lasting six months, would relocate S. Gulfview traffic to the existing beach parking lot between First Street and the South Beach Pavilion. 200 of the lot's 280 parking spaces would be retained during construction. Phase 2 will widen Coronado Avenue to 3 lanes, eliminating the back-out parking used today by guests of Coronado's small motels. One lane of traffic would be maintained during construction, with the other lane detoured onto Hamden Drive; this phase is expected to take 1 year to complete. The final phase will reconstruct S. Gulfview and the Beach Walk pedestrian facilities, eliminating the beachfront parking lots; phase 3 construction is expected to take 2 years.
What is the return on Beach Walk's $15 million investment for the taxpayer? The only positive cash flow identified is a $335 thousand annual increase in ad velorum taxes on the Hilton resort property. But that is more than offset by the $730 thousand annual loss in City parking revenue; some might consider the resulting $395 thousand annual loss a poor return on investment. But Assistant City Manager Garry Brumback sees Beach Walk creating an environment and demonstrating a commitment that will pay off in the future. Pointing to resort projects applied for at the Clearwater Beach Hotel and properties owned by Tony Markopoulos, Brumback said, "If the other 2 projects happen we're at a $1.5 million increase in ad velorum taxes. And if Coronado redevelops, it will produce even more tax revenue."