Leland “Lee” Pillsbury is no stranger to the hotel business. He is co-founder and co-chairman of the company that owns the 1,000-room Diplomat Beach Resort in Hollywood, a hospitality landmark in South Florida. Yet he and other investors retreated from a plan to build a new resort hotel in Lauderdale-By-The-Sea after riled residents protested. Pillsbury and other investors had a contract to acquire two former hotel properties near the beach, and a plan to build a new hotel on part of El Mar Drive, the street that separates the former Holiday Inn and Villa Caprice properties. Public pushback against the investors’ plan to cut a chunk out of the town’s oceanfront street may have hastened their retreat from Lauderdale-By-The-Sea. In January, the investors withdrew their site-development plan for the former hotel properties before town officials could approve or reject it.
Critics argued against surrendering a section of the street to the developers. El Mar Drive is the “Main Street” of Lauderdale-By-The-Sea. The one-mile municipal street hugs the oceanfront east of A1A (also known as Ocean Drive in the 1.5-square-mile town). “They wanted to take town property, and that’s definitely against what Lauderdale-By-The-Sea is and has been,” says Chris Vincent, the town’s mayor. “That was not received well by the town or the residents – the voters.” Pillsbury, co-founder and co-chairman of Thayer Lodging Group, the Annapolis, Maryland-based owner of the Diplomat hotel in Hollywood, could not be reached for comment. He had planned to invest in the Lauderdale-By-The-Sea project through a firm called TLG Investment Partners together with Marietta, Georgia-based Wilshire Concord. Officials of Wilshire Concord also were unavailable for comment.
Efforts to redevelop the former Holiday Inn and Villa Caprice properties were complicated by an adversarial relationship between the town government and the owner of the properties, a Boca Raton-based company called Florida Development Group South.
In December 2018, the town government filed a foreclosure lawsuit to seize the former hotel properties from Florida Development Group due to its failure to pay fines totaling more than $7 million for building code violations. In January 2019, however, town commissioners postponed the foreclosure for a 30-day “stay” period to give Florida Development Group time to put the property under a purchase and sale contract with a potential new owner.
That was the first of several postponements in the foreclosure proceedings during 2019 that gave Florida Development Group enough time to reach a deal to sell to the former hotel properties for an undisclosed price to Concord Wilshire and TLG Investment Partners. The investors subsequently submitted a site-plan application to the town government and presented the plan to the public at a Town Hall event in June. But many people who attended the June event criticized the plan to eliminate a section of El Mar Drive between the old Holiday Inn and Villa Caprice properties, allowing a new hotel to extend uninterrupted from the east side of A1A to the beach.
The investors submitted a revised site plan to the town government in December but withdrew it the following month without explanation. The latest postponement of the town’s foreclosure against Florida Development Group expired Feb. 7, and after a 20-day period for the property owner to respond, the foreclosure proceedings resumed Feb. 27.
Florida Development Group has stopped some of its financial bleeding by demolishing the old Villa Caprice hotel at 4108 and 4110 El Mar Drive, which ended the accumulation of fines on the property for building- and site-maintenance violations of the town’s building code. The company also has obtained a demolition permit to tear down the old Holiday Inn hotel at 4116 Ocean Dr. As of this story’s deadline, the larger of the two properties, the 183-room skeleton of the former Holiday Inn, was still intact and accruing code-violation fines. Zoran Zelenikozki, who manages Florida Development Group, did not respond to a request for an interview.
“They were not in the business, or they didn’t know how to operate,” the mayor says. “It’s been a problem for the town for 10 or 12 years now … It sat dormant, and has continued to, because we’re not getting the right kind of investors involved.”
The last group of investors, which had ample hotel expertise in Lee Pillsbury, may have struggled to justify a pricey beach project in a town that opposed it. The price TLG Investment Partners and Concord Wilshire would have paid for the Holiday Inn and Villa Caprice sites is confidential. But public property records show that Florida Development Group bought the hotel properties as a package for $14 million in 2014 – two years after the previous owner had paid $5.4 million. “I believe Florida Development Group may have overpaid for the property,” Vincent says. “The owners prior to Florida Development Group flipped it at a dollar value that may have been over-inflated.”
But the mayor is optimistic about the potential for redeveloping the former hotel sites. The Holiday Inn and Villa Caprice “had been there for 50-plus years, and they were vibrant and profitable,” he says. “Of course it can be successful. It’s been successful in the past, and there’s no reason it can’t be successful in the future … It’s just a matter of getting someone in there who knows what they’re doing.”
