Naples hotelier and restaurateur Phil McCabe's appetite for economics, and risk, helped rebuild what's now a star attraction in downtown Naples: Fifth Avenue South.
Boston native Phil McCabe, now a prominent hotelier and restaurateur in Naples, managed to save his $25,000 nest egg while he served in the U.S. Air Force during Vietnam and worked for the CIA.
Although a new mission stationing him in Australia sounded “exotic,” McCabe declined. “My entrepreneurial spirits were being born at that time. I said, 'I need to go out into the world and find a business,'” he says. “And I felt pretty rich with $25,000.”
Then 27, McCabe purchased a bankrupt beachfront hotel in Maine, rescuing the business. He continued with several ventures. But the anti-growth mentality in Maine “didn't fit with McCabe,” he says.
In the 1980s, McCabe was touring South Florida for an area ripe for hospitality and growth. When he visited Naples Beach, a friendly, wine-sipping couple insisted McCabe join them on their blanket to watch the sunset. “That is the personality of this town,” says McCabe.
Despite a “love at first sight,” mindset with the city, McCabe says he discovered Fifth Avenue, now a shopping Mecca, “was a total failure.” There was a 40% vacancy rate, and rent ran $10 a square foot, says McCabe. Today's price is over $1,000 a square foot.
Over the next several decades, McCabe played an integral role in the resurrection of downtown Naples. In 1998, he purchased a failing bank building on Fifth Avenue South and transformed it into a luxury hotel called the Inn on Fifth. “It was a gamechanger,” says McCabe.
While expanding and upgrading the hotel to include Club Level suites, McCabe stayed intimately involved with the growth of the city and Fifth Avenue. He partnered with city officials on projects and supported multiple arts organizations.
Today, Fifth Avenue South hosts more than 200 businesses — restaurants, retail, professional offices, galleries and theaters. It's a destination street for locals and tourists written up as a must-hit place in Naples.
McCabe's newest project is Fifth and Fifth, a mixed-use property with luxury residential units, first-floor retail and what area officials call the first subterranean garage in downtown Naples. McCabe says the price of land forced him to go underground for parking.
McCabe, 70, recently sat down with the Business Observer to talk about his development career. Edited excerpts follow:
What are the personality traits you have that led your success?
I am a risk-taker, although I am a measured risk-taker. Today, I take far less risk because of my age. The Fifth on Fifth project may seem like a big risk, but there was a tremendous amount of study, understanding everything about the economy, the demand, cost, budget, the opposition. I did it with total, absolute 100% confidence.
Also, I am absolutely blessed with a three-dimensional vision and thought-process. When I work with my architects, engineers, builders, my interior design firm, I work with other visionaries. I call them my “imagineers.”
You closed McCabe's Irish Pub to build the Club Level Suites for the Inn on Fifth. How did you know you were making the right decision?
I am a student of macro-economics. I really enjoyed it. I was reading the Wall Street Journal when I was 18. A lot of that decision has to be based on your intuition. What do you think the economy is doing, whether it is micro or macro, local, national or global economy? Then you have to come down to your particular business: is it viable? As a businessperson, you are making those types of decisions all the time.
McCabe's (Irish Pub & Grill) was especially hard because McCabe's was a viable business making a lot of money, and had quite a branding and a reputation of value. That was one of my toughest on concluding a business. You had to look at the larger view: If I can turn my hotel into a four-star, McCabe's noisy Irish Pub has got to go, and I can make a whole lot more money and take this street to another level.
What are some obstacles you face with Fifth and Fifth?
It has been very difficult with some of the neighborhood. They don't really get it.
They don't understand visioning and good planning. Some of these people can be very selfish. I characterize them as condo-commando types. They're difficult people, complainers, takers. Unlike so many in this town who give their time and money, they don't give a nickel. Going back 15 years, we were putting in a sidewalk. Even though it was not a part of their property, it was the right of way of the street, they opposed it because they didn't want tourists walking by their property or looking in their windows. There are those with that type of personality wherever you go, in any neighborhood or building.
What does it take for government to build better relationships with builders and see more successful outcomes in city planning?
Here in Collier County, in the city of Naples, there is a great relationship between the public and private. This city has never been managed better. It starts from the top down.
The mayor, city manager, assistants and all departments, they are so good at communicating and working with the stakeholders and residential community. There are many towns that are grossly mismanaged with no communication or cooperation among public and private. And that is the personality from the inside out, whether it is elected officials, or who they hire to manage. It can get very complicated. Like Congress, it doesn't work.
Here, we have managed historically, going back to when this city was kind of born, just compromising smart people who understood what they wanted. If it's not working, you either have to vote somebody out or fire somebody.
Once public and private entities agree to cooperate, what actions can each side do to improve the projects?
There are amazing private communities that achieve perfection through deed restrictions.
A city needs a similar a structure if it wants to be a great city like Naples. How do they do it? With codes, zoning, oversight, overview and management. Zoning is always shifting and changing. We brought in (urban planner) Andres Duany two months ago. He studied for 24 hours and publicly gave us his views, and then City Council, owner, and residents debated on changes.
Once you get that, like when we did our overlay (with Duany) 22 years ago, that's the bible right there, of what the city is going to be doing. It's managing that, ensuring it's done correctly, compliant. Duany has the credit among all and is neutral as far as politics, versus me, the greedy developer, versus that condo-commando type. Duany has no agenda. Cities suffer when they don't bring in someone like Duany or wait until it's too late.
Who are your mentors?
My mentor is not a person, it's an operation. The Ritz-Carlton on the beach — this hotel is firing on all cylinders. It is absolutely deserving of five stars because of the service side. It's a big deal to get there. And getting four stars is a big deal. We work very hard at that every single day. I have a staff meeting each week and that is the top of the agenda.
Building an amazing team, I call them my rock stars, is a matter of constant development, capital improvement, refinement and improved efficiency. We've got it down now. We operate like a Swiss watch.