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Business Observer Friday, Dec. 12, 2003 15 years ago

From Eyesore to Hilton Brand

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Sarasota's Merca Real Estate plans to transform one of the area's most unsightly buildings into an upscale extended-stay hotel.

From Eyesore to Hilton Brand

Sarasota's Merca Real Estate plans to transform one of the area's most unsightly buildings into an upscale extended-stay hotel.

By Sean Roth

Real Estate Editor

Enzo Gagliardi doesn't see the dilapidated walls, the debris-strewn courtyard or even the fire damage. The developer, who lived most of his life in France, sees opportunity; he pictures the property a year from now as a Mediterranean-style Homewood Suites by Hilton.

Gagliardi's newest project is renovating the half-built former assisted-living facility at 3470 Fruitville Road, Sarasota. The property was formerly known as The Gardens.

"It has a history," says Eric Collin, Gagliardi's cousin and project manager. "Basically it was originally developed as a nursing home. It seems the developer went bankrupt and never paid the general contractor (Pompano Beach-based Advanced Modular Systems). So they foreclosed on the property."

At that point, Sid Dworkin, owner and chairman of the board for Advanced Modular Systems, died. Dworkin's company then passed to his widow, Doris Dworkin, who eventually sold off business and property.

However, because of a foreclosure action and the turmoil following the death, the property sat vacant for several years and it became a hangout for troublemakers and the homeless. In 1997, a fire started in one of the units, partially destroying one of the four buildings. Hooligans threw rocks through the windows and even stole the air-conditioning systems from the ground floor units.

In January of 2002, Sarasota filed a demolition order citing repeated zoning and code violations. Gagliardi and Merca Real Estate stepped in.

Gagliardi, a well-known developer in France, and his family had moved to Sarasota in 1996 after several years of vacationing here. The developer says it was love at first "site" when he came across The Gardens property.

"This is clearly the ugliest building in Sarasota," Gagliardi says. "But the structure was sound. I wasn't looking at the (existing) building; I was looking at it the way it would look after I renovated it. I could imagine a better use for it."

So Gagliardi went to the city and appealed the demolition order. At the time, he planned to refurbish the four building complex into a long-term stay 110-unit motel, called the Saravista Gardens Motel.

"It wasn't easy to convince them (the city commission)," says Gagliardi. But Gagliardi's development history was persuasive. The 44-year-old developer has been renovating buildings for almost 27 years.

"At 17, my mother loaned me $2,000 to buy a building," he says. Working in the town's sugar factory to finance the building's repairs, Gagliardi's first house took four years to renovate. "(In one example,) I had just bought the shingles for the roof, but I couldn't put them up because I didn't have the money to buy the nails."

Business grew from there.

Gagliardi made the most of his money converting large factory buildings into residential development. This would be his first motel.

Gagliardi developed a reputation for himself and his main business MUST Investment. The mayor of the city of Crespin, France, R. Flamcourt, even wrote a letter to Sarasota's planning and development director supporting Gagliardi. The city commission unanimously approved the project.

Merca Real Estate purchased the property in July of 2002 for $1.4 million.

The Merca Real Estate staff then started looking at possible hotel franchises for the Fruitville location. It wasn't long before one of the companies was interested.

"Sarasota has been on the map for a while now," says Jim Holphouser, senior vice president of brand management for Homewood Suites by Hilton. "We had always planned to put one (of our hotels) there." Gagliardi and Homewood Suites reached an agreement. Gagliardi would need to build an upscale hotel per Homewood Suites' standards, but when it was completed the Hilton brand would manage it.

Even with the national brand name, the Garden property is unique. When it is completed it will be the first converted assisted living facility in the Homewood Suites chain.

"We don't do many conversions," Holphouser says. "There have been a couple historic buildings that have been converted, and a few existing hotels have been rebranded. Ninety-five percent of our hotels are built from the ground up. They approached us ... and had a good vision."

Brian Fry, director of franchise development for Hilton Hotel, says the project went through several levels of plan review. "We care less what it is converted from," he says. "We care about whether the site will work ... and that we maintain the brand standards." Hilton executives believe the abandoned assisted-living facility can be transformed into quality lodging.

Asked about the impact of a proposed arena at the Sarasota Fairgrounds location, Frye says it would help create demand.

With the addition of the Homewood Suites name, the project needed to be much more upscale than originally envisioned. George Palermo of the Sarasota's George Palermo Architect Inc. designed the facility to Homewood Suites standards.

The project, which is now underway, is expected to cost $10 million, including the cost of buying the property. The Sarasota office of R.E. Crawford Construction, is replacing the walls, adding new interiors and full kitchens on top of extensive exterior renovations. Merca Real Estate plans to build a tropical garden that includes playground equipment. The hotel will also feature a conference area for weddings and corporate events.

"We are tearing down just about everything," says Collin. "When people ask us what we are doing here they just don't believe it. They just can't visualize it."

Gagliardi is also developing a retirement village in Crespin. Asked about his next plans in Sarasota. "I really like Fruitville (Road) and University (Parkway)," says Gagliardi.

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