Daytona agrees to plan to repair A1A in front of the Protogroup hotel
DAYTONA BEACH – City commissioners may have saved the company that owns the Daytona Grande from going bankrupt and losing ownership of the $ 100 million hotel, at least for now.
But the deal with the owner of the beachfront hotel that the commissioners approved at their Wednesday night meeting uses money the city has been planning for years to send to the hotel. Deputy city manager Jim Morris bristled with gossip on social media, suggesting the city was saving a private company with taxpayer dollars.
“There is no bailout,” Morris said at Wednesday’s town hall meeting.
Protogroup, the Palm Coast company that owns the Daytona Grande, told the city it had used up its construction loan funds and had no money left to pay for the intersection improvements it had is obligated to cover under an agreement with the city, according to a memo. by Morris.
“Without funds for the work, Protogroup will not be able to perform the restoration of the SR-AlA / Oakridge intersection,” Morris’s note said. “Protogroup is now forced to close the construction finance loan and secure permanent financing in order to avoid bankruptcy and to maintain the ownership and operation of the convention hotel property.”
The city will therefore withhold $ 283,829 of the $ 1.1 million it was going to send to the company in reimbursement of water and sewer impact charges and divert the money to repair the intersection.
“It’s their money,” Morris told commissioners.
Prior to Wednesday’s meeting, Protogroup had already signed off on the plan, which will allow the Florida Department of Transportation to take over work on the intersection.
A long-standing agreement with the city required the company to complete improvements to the intersection in front of the hotel before the city issues the permanent occupancy certificate. The Daytona Grande has been operating since June under a temporary occupancy certificate.
Without a permanent occupancy certificate, Protogroup cannot secure a permanent loan for the hotel project and would likely lose the 28-story Daytona Grande which sits at the southeast corner of State Road A1A and Oakridge Boulevard.
“The mechanisms we have in place to protect our assets and the assets of the community are working,” said Mayor Derrick Henry. “Overall, what we’ve done here is working as well as it can get.”
In addition to making sure the high traffic intersection is repaired properly and quickly and reinforcing a new hotel, the city had another big incentive to help. If the restoration of the intersection can be completed by next month and the city can issue the permanent occupancy certificate by December 31, the Daytona Grande could be on the 2022 tax roll, said Morris.
This will mean that large annual property tax payments will start flowing from Daytona Grande to City Hall, even if the property is sold or goes bankrupt, he said.
‘It’s a mess’
This is just the final dilemma for the 455-room Daytona Grande, which has seen its construction deadlines repeatedly extended, changed contractors twice, and built a westbound valet lane on Oakridge Boulevard in one way direction is without the necessary approval.
An agreement with the city government mandated Protogroup to restore the intersection in front of the new hotel after new water and sewer lines were installed under that crossing.
Those new enlarged water and sewage systems needed to service the towering hotel are now in place, but the intersection has a further drop in elevation and is covered with a mixture of makeshift asphalt patches and colorful paving stones.
“It’s a mess,” Morris said in an interview Monday. “Aesthetically, this is unacceptable. This is not what we want in front of a luxury hotel. And we don’t want the intersection to fail in a few years.”
Construction of the hotel is complete, but intersection improvements and some lingering sidewalk and landscaping work still need to be completed, Morris said.
Protogroup, the Russian family business behind the Daytona Grande business, runs the risk of defaulting on the construction loan if it does not complete the project on time, does not get the permanent occupancy certificate and does not provide permanent funding. The permanent funder wants to know that a business license has been issued and that a permanent occupancy certificate that the building is safe is in place, Morris said.
The city’s agreement with Protogroup
The city had agreed to give Protogroup up to $ 1.1 million for the extension of new underground water and sewer lines from Halifax Avenue to the A1A, an upgrade that expanded the system. of public services in the city. The money was intended to be a reimbursement of impact fees that addressed the hotel project’s impact on the city’s utility systems.
The new lines are about 20 feet underground, so it is important that the sandy soil on the beach above the pipes is properly compacted and topped with a solid concrete base in the area of the intersection that was disturbed, Morris said.
In addition to repairing, resurfacing and repaving the beach side intersection with colored concrete, Protogroup is also obligated to complete the remodeling of the Oakridge Beach ramp and sidewalks.
The beach ramp appears to be complete, except for the addition of new sidewalks and landscaping around, Morris said. Protogroup will need to provide the city with a performance guarantee for the required sidewalk and landscaping improvements, he said.
The city will not release any of the remaining funds of the $ 1.1 million in water and sewer reimbursement until a performance bond is in place.
The hotel is part of a $ 192 million twin-tower hotel-condominium project that has been in the works for nearly a decade.
Excavation work on both towers began in March 2017, with a first completion date slated for summer 2019 for the 28-story hotel’s south tower. The tallest north tower of the 32-story condo, which is said to be the tallest building in Volusia County, was originally scheduled for completion in 2020.
The city has accepted several extensions. The current deadline for the completion of the South Tower is March 18, 2022. The North Tower, which has only had foundation work so far, faces a construction deadline deadline. March 16, 2024.
You can contact Eileen at [email protected]