Tuesday, January 09, 2007

Kicking the Legs Out From Key West Tourism

After watching the City of Key West Commisssion Meeting last week I was in a bit of shock.
On the Commission agenda was a proposal aimed at stopping the conversion of Key West hotels to condos/condotels. Previously I wrote that selling off the hotel rooms and converting them into luxury second homes, condos, and condotels is suicide for the tourism business. No sane leader would do it.
Since I warned that the city was allowing tourism, the main engine of the Key West economy and community, to be dismantled, I was amazed and saddened by the position of our Mayor and two of our commissioners.
I wanted to write something about it...I knew I had to. But it took days for it to settle in, and until I rewatched it (on the local public access rebroadcast) I couldn't quite figure out where to begin.
I've decided it would be easier at this point to detail the meeting:
Commissioner Mark Rossi created the proposal to stop the conversions of hotels to condos (transient to non-transient).
Public comments were heard, and nearly every single person spoke in favor of the proposal. Business leaders, Chamber of Commerce President, and workers stepped forward to let the city know that selling off the hotels will be disasterous. Ed Swift, the owner of Conch Train and numerous other tourist dependent businesses, warned that if the city does not act to halt the trend of conversions then we are "disassembling this economy." Swift mentioned that over 2500 RV and hotel units have been lost in the Keys due to the conversions taking place.
One person did speak out against passing the proposal to ban conversions: lawyer Jenny Stone. She said that the legislation was procedurely improper. The newly hired city attorney forcefully argued that the legislation was proper, and sounded ready to head to the Florida Supreme Court.
But mostly everyone spoke in favor of stopping the conversions of hotels to non-transient use.
Next the proposal was brought before the commissioners.
Rossi led off, noting that tourism is "our lifeblood" and that he was worried. Rightly so. Rossi owns bars on Duval Street, and he said business is down. An even more ominous sign, Rossi pointed out, was that there are commercial vacancies on Duval Street and Simonton Street and that businesses are having a hard time surviving.
Commissioner Menendez agreed with Commissioner Rossi - then he launched into a scolding about the affordable housing crisis and the fact that the city leaders have done little to make a dent in the problem.
Next up was Commissioner Verge, who can be difficult to read while his comments wander back and forth over the various opinions aired. Finally he revealed his opinion of tourism, saying that Key West is "...at a crossroads between mass tourism and a different kind of tourism." Verge mentioned Vail, Colorado and said that change "naturally occurs." Someone should tell him that Vail was built to be a tourism town...there was no town there before it. Then Verge went on to espouse the virtues of higher property values, mentioning how the enigmatic developer Pritham Singh turned a $10 million dollar piece of property into a $90 million dollar piece of property (presumably Truman Annex), and that meant higher tax receipts. Verge also didn't believe that all these hotels in the condo-conversion process were truly offline because the Holiday Inn Beachside still has rooms availabe. Actually Commissioner Verge you are incorrect - the Holiday Inn bought the property across the street and is now renting rooms under the Holiday Inn name. The old Holiday Inn, the one in the process of converting to condos/condotels, is not renting rooms. Rumor is that people are unhappy with the investment and are threatening lawsuits. Verge also pointed out that since the occupancy rate on the island is less than sold-out than "maybe we overexpanded." Also, he said about restaurant seats is "maybe 18,000 restaurant seats should be 14,000. In the end, Verge was o.k. with tourism suffering and stated he would vote against the "moratorium".
Commissioner Bethel kept his comments brief and to the point. He didn't say one way or another what he thought about tourism. But what he knew he believed in was property rights. And damn anyone who will interfere with property rights. He was dead against Rossi's propoasal.
Last up was the Mayor who began with a confusing joke about Bush and the French & Indian War, saying why fight a battle that is already over? In his words, "This war is over...the invisible hand took care of it." The Mayor was referencing the crash in the Key West condo market, and that a developer would have to be insane to get involved in a new conversion project. In his words, "We are experiencing market failure today."
So you are in favor of tourism Mr. Mayor? NOT! The Mayor began speaking out of the other side of his mouth arguing that hotels are not full and are charging too much. He mentioned that the Comfort Inn had charged $286 the other night, and that he didn't think guests that paid that much for a room "buying trinkets" in reference to Ed Swift & Company's warnings that business is hurting.
The Mayor might not understand or like tourism. It doesn't sound like he does. By blaming the slow tourist season on the hotels ignores the fact that the northeast and midwest have had the mildest winter in a century. If it is 70 degrees in NYC, people don't feel the need to head to Florida.
In the end, Commissioner Rossi's proposal didn't pass and the Mayor said that now is a "true new day". According to him all we need is a little "onterpuhnerial speerat".
Tell that to the business owners, families, and workers that make up our island.
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1 comment:

Bob Kelly said...

This item from WSJ is up your alley, Don.

http://online.wsj.com/article/SB120735504829291471.html