Construction starts on long-awaited convention center hotel in Palmetto

It’s suffered many pitfalls since it was first announced in 2017, but the much-anticipated new hotel project near the Bradenton Area Convention Center in Palmetto is officially under construction.

The celebratory groundbreaking ceremony held on Tuesday starts a 20-month construction schedule that will see an eight-story full service Sheraton Hotel rise from the ground. The hotel will feature 252 guestrooms, a full service restaurant and more than 10,000 square feet of meeting space, including a 7,600-square-foot ballroom.

Other features will include a rooftop lounge with deck, a 1,500-square-foot fitness center, an outdoor pool and 32,420 square feet of outside event space.

Managing Director for IN Development Partners Tony DeRusso has envisioned this project from the beginning and despite the many obstacles that delayed it from becoming reality, said he is “grateful for the support from our team, the city of Palmetto and the Bradenton Area CVB, and am thrilled and humbled to join such an amazing community through this project.”

Lee Hancock, managing principal partner said the project will be a “one-of-a-kind destination where we know leisure and business travelers alike will want to visit.”

The city of Palmetto and its Community Redevelopment Agency eventually took over the lion’s share of the project when the initial efforts fell through in September 2017 and Manatee County decided to pull out of the original agreement.

The original project was much larger in scale, but efforts to obtain additional property fell through, leaving the development team and the city to work solely on city owned property.

“Our team has been focused on redevelopment and strengthening our infrastructure, thus positioning the city for a bright future,” said Palmetto Mayor Shirley Groover Bryant. “Visitors to the convention center, as well as residents county-wide, have long awaited the arrival of a full-service hotel to this location, and I am confident it will serve as a driving force behind future projects that will further benefit the entire destination.”

Once the Sheraton is completed, construction plans call for a covered walkway from the hotel to the convention center, which will undergo an expansion and renovation, “to ensure the product matches that of the luxury Sheraton next door,” a press release states.

Elliott Falcione, executive director of the Bradenton Area Convention and Visitors Bureau, said the project will stimulate the local economy on a year-round basis, bring jobs and attract more groups, “to an important area of the county.”

It almost never happened

The original project was worth $69 million and called for a 204,000-square-foot hotel with more than 17,000 square feet of meeting space, among other amenities.

By August of 2017, the project started to fall apart when DeRusso said there was a “hole in capital stack,” due to increased construction estimates, as well as having to negotiate a 12.5-acre property essential to the project. What DeRusso didn’t tell his municipal partners is that one of his investors reneged on putting down a contracted $225,000 deposit.

The landowner eventually took them to court and won the promised money without having to give up the property. City and county officials were unaware of what transpired until contacted by the Bradenton Herald and the deal collapsed.

It took a few months for DeRusso to gain back some trust and later said he was unaware of the specifics surrounding the land. A big part of gaining the trust back was his tenacity in continuing to express a desire to make the hotel a reality.

DeRusso’s team later secured the property before a deal with the city had been finalized in a show of a good faith.

Under the development agreement deal, the developer will get to keep 80 percent of the tax increment funds generated by the hotel up to $6 million. It was a compromise from Palmetto’s original pledge of $8 million. Once the $6 million is surpassed, the Palmetto CRA will retain ownership of the land the hotel sits upon and then keep all of the TIF funds generated.

This story was originally published January 10, 2020 at 5:00 AM.