Palmetto hotel deal fell apart last year. Now developer wants to build two hotels

Almost a year after the plan for a new hotel at the Bradenton Area Convention Center fell apart, the Palmetto City Commission has voted to move forward with a new plan from the same developer.

The new plan, approved by the commission on Monday, also calls for two new hotels instead of one.

There are several changes from the original plan that involved both the city and county. To simplify the process, the county-own properties have been eliminated from the project. The developer is focusing on one city parcel, as well as buying one 12.5-acre parcel from a private landowner.

The latter had been the sticking point that led to the deal’s termination late last year because the property was key to the project and a sale never went through.

Developer Anthony DeRusso said those issues have been resolved and he expects to close on the property for an undisclosed price by the end of the week.

The new plan still calls for an eight-story, 251-room Sheraton hotel with rooftop lounge. On the city-owned parcel, the developer would build a7,500 square feet of restaurant and retail space.

In addition to the Sheraton, DeRusso is considering building a four-story, 126-room Key Hotel.

There are trust factors to overcome given what happened when the deal went south after suffering several delays last September. Construction was originally set to start Sept. 1, 2017, and would have been completed this November.

DeRusso eventually acknowledged he had hit a “hole in capital stock,” but failed to inform the city commission of his troubles in acquiring the key piece of property DeRusso said he is about to close on by Friday.

“He’s got to do his due diligence as far as what he will submit,” said Mayor Shirley Groover Bryant. “He brought up that it was supposed to be a Sheraton product and we want to make sure it is. This will be a much better process for the city in the way it will be done this time.”

City attorney Mark Barnebey said last year that if there was a second try, the process would be simplified because most of the documents are in place. However, because the original stipulations with the project have expired, the conceptual development plan has to be approved again.

The city also is backing away from its original agreement to invest $8 million up front in Community Redevelopment Agency funding, which was expected to be returned to the city over time with tax-increment funding generated by the hotel. The city will not provide funding up front this time, but approved $6 million in CRA incentives to paid out as the TIF funds roll in from the completed project.

DeRusso has up to one year to bring forward a general development plan, according to Karla Owens, city planner. Owens said as part of the deal, the city maintains that the developer must also construct a connection from Seventh Street East to Haben Boulevard, a move city officials have wanted for some time to ease traffic flow in the area.

The project is estimated to cost $60 million.

Sheraton has three different brands for their hotels, beginning with the standard full-service brand and increases in luxury with the other brands. DeRusso said this will be Sheraton’s full-service brand.

“We are going to put in a number of conditions toward the quality of the hotel to the type and nature of the hotel,” Barnebey said.

Monday’s approval was to allow the developer to move forward, but the project will undergo future public hearings as plans are refined.