DAYTONA BEACH SHORES — One of the beachside’s longtime eyesores, the long-abandoned remains of the Treasure Island Resort, has moved another step closer to the wrecking ball.
The Daytona Beach Shores City Council on Tuesday unanimously approved the first reading of a development agreement that provides incentives to the property’s owners, New York-based Acres Capital LLC, to demolish the deteriorating remains of the once popular hotel and redevelop the site into a new hotel-condominium complex.
The council decided to move ahead to a second reading later this month, even as city staff continues to hammer out final details on the agreement. Most notably at issue is the time frame that the owners have to redevelop the property that has been a gutted hulk for nearly two decades, since a series of storms damaged the structure in 2004.
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However, in a lengthy discussion that preceded the vote, council members indicated that another timetable — the long-awaited countdown to the demolition of the deteriorating skeleton of the once-popular Treasure Island Resort — was the more immediate priority.
“The main goal is to get that eyesore down,” said Mayor Nancy Miller. “This will accomplish that.”
If the second reading of the development agreement is approved at the council’s next meeting on Jan. 25, the clock will start ticking on a 120-day deadline for demolition.
Agreement includes ‘demolition safeguard’
In a negotiation session on Monday, a “demolition safeguard” was added to the agreement to ensure that the property owners meet that timetable.
It states that if demolition doesn’t commence within 60 days of the agreement’s final approval, the owner will place funds in escrow to cover demolition cost with an option for the city to access and finalize demolition within 120 days.
The safeguard section also requires that the property owner adequately restore and maintain the site within 150 days of approval, a process that includes removing debris, leveling the site, planting sod and building a fence or guardrail along the seawall.
“We’re trying to get this done quickly, too,” said Rob Merrell, the Daytona Beach attorney representing Acres Capital told the council. “If we don’t start demolition on the building in 60 days, we’ll put the money up to get it done.”
When it comes to the plan for redeveloping the property, the agreement leaves open the option for two potential designs.
One plan, presented to the council in a series of artist renderings, calls for the construction of a single 17-story tower on the Treasure Island site, consisting of 300 hotel rooms and 200 multi-family/condominium units.
The other plan, initially presented to the city in August, proposes construction of a 13-story, 300-room hotel and a 23-story, 200-unit condominium building. At that time, the company estimated that it would invest $100 million into the project.
In negotiations, the city and the property owner have differed on the time frame to move ahead on the redevelopment of the site into the hotel-condominium project.
On Tuesday, city staff recommended that the council accept Acres’ proposal for an eight-year time-frame to receive a building permit and pay permitting fees for the single tower design. The city had proposed a five-year time-frame for receiving a certificate of occupancy.
If the two-building design is selected, city staff recommended that the council accept Acres’ proposal for an eight-year time-frame to receive the building permit for the 13-story hotel. The city had proposed a five-year deadline for receiving a certificate of occupancy for that building.
For the 23-story condominium in that design, both parties agreed on a 15-year deadline to receive a certificate of occupancy.
Market factors impact timetable for redevelopment
Ultimately, the timetable for redeveloping the property depends on market factors out of the control of both the property owners and the city, Merrell said.
“It’s the marketplace that decides if a hotel gets built there,” he said. “That’s the business reality of the situation.”
That flexibility on the redevelopment timetable was reasonable, said Council member Michael Politis.
“Sometimes you get, sometimes you give,” he said. “I would have no problem with the eight years. Let’s get a solid commitment for demolition. Then at least we’re no longer looking at an eyesore.”
Timely demolition of the existing Treasure Island is at the core of a stipulated settlement agreement between the city and Acres Capital that entitles the company to receive an estimated $1.4 million in projected city property tax rebates over 15 years to demolish the building and redevelop the site.
According to the agreement, approved by the City Council in August, the developer must demolish the existing skeletal remains within 120 days of the document’s final approval to become entitled for the incentives.
If the developer fails to meet the 120-day deadline, the city would then have the option of returning to the special magistrate to reopen a condemnation order.
The agreement states that at the time that the developer completes construction, the city will enroll the project in its Alternative Tax Relief program, offering a 100% rebate on city taxes for an initial five years; a 75% rebate for the next five years; and a 50% rebate for five years after that.
The developer will pay taxes during the time the project is under construction, said Kurt Swartzlander, the city’s finance director.
For the 15 years of the agreement, the city estimates that the project will increase city property tax collections by $364,655 for the hotel and by $3,230,520 for the condominiums. That’s a total of $3,595,176 for both properties.
The 12-story Treasure Island was once considered one of the area’s most grand resorts in the decades after its construction in 1974. Since its decline, it has become a lingering symbol of the effect of hurricanes and recession on the area’s beachside tourism industry.
In the wake of the Surfside condominium collapse, the Treasure Island property is also a reminder of the impact the elements can have on a high-rise structure just yards from the Atlantic Ocean.