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Mainsail Lodging and Development
Why 2016 is important: Company plans to open its new resort on Anna Maria Island and another hotel in the region, with a third under construction.
Executives at Tampa-based Mainsail Lodging and Development are looking forward to a big 2016.
They are currently breaking ground on a new resort on Anna Maria Island, set to open next fall. They're in final talks with a couple other hotel opportunities, one to open next year and one to begin construction. And to keep up with the growth in properties, the 400-employee company will probably grow 25% in employees.
Company officials credit almost all of their success to being passionate and stubborn, and they candidly admit they persevere a little too much at times. The company was hit hard by the meltdown and tourism industry slide of the late 2000s. It was a time when “a lot of developers decided to wash hands and hand keys over,” Mainsail President Joe Collier says.
But the Mainsail owners had too much riding on the success of the company, including a number of family investments, Collier adds, to give up or even slow down. It's a stubbornness that carried them through a bankruptcy battle with their Scrub Island Resort in the British Virgin Islands and several years of working through cumbersome development approvals on Anna Maria Island.
The persistence has finally started to pay off for the company, which focuses on corporate housing and managing niche hotel and resort properties in the Marriott Autograph Collection. It's most visible recent success has been local — at the Epicurean Hotel in Tampa's Hyde Park.
In the first full year managing the Epicurean Hotel, the firm has a 79% occupancy rate, making it an area leader. “It usually takes about three years” for a hotel to prove its sustainability, Collier says. The company projects the hotel will stay over 80% in occupancy this year.
It's an impressive feat. According to Visit Tampa Bay, average hotel occupancy in Hillsborough County is 72% for the 12 months ended in October, up from 70.4% from October 2014. In the downtown area, occupancy has averaged 74.8% in October, up 4.3% over last year, reports Visit Tampa Bay. Revenue per available room, a closely monitored industry metric, is averaging around $105.98 year-to-date downtown, up 10.1% from last year.
The Epicurean sees its highest occupancy on Saturday nights, when many other properties feel a small dip. It speaks to the experience the property provides, Collier says. “Our niche appears to be in hospitality; we're intrigued by the success of the Epicurean hotel.”
Experience providers
Mainsail was attracted to the Epicurean because of the unique experience its owners provide at their nationally known flagship restaurant, Bern's Steak House. “When anyone in hospitality sees what happens at Bern's, they are blown away. It's a very unique institution.” Collier says.
When the owner of Bern's, David Laxer, reached out to Mainsail to see if it was interested in developing and managing the hotel to provide a boutique experience for foodies, Collier had one caveat: the property had to be a part of Marriott's Autograph Collection. “An independent hotel is scary from a financing perspective,” Collier says.
Associating with Marriott's Autograph Collection allows Mainsail to be fueled by the “horsepower of a brand like Marriott” without having to fit in the “cookie cutter” mold of a typical Marriott hotel, Collier says. Instead, the company focuses on more boutique, high-end experiences. There are 100 hotels in the Autograph collection, which is Marriot's fastest growing collection, Collier says.
High-end experiences define the company's mission for its latest investments. Mainsail's Waterline Marina Resort and Beach Club, the new resort under construction on Anna Maria Island, for example, is partnering with Sarasota-based Mote Marine Aquarium to provide unique eco-experiences for guests.
The construction has been long anticipated by the company. It bought the property in 2009 from Mercantile Bank. It paid $8.25 million for the mortgages and took ownership in lieu of foreclosure, according to Manatee County property records.
Mainsail was intrigued by the impressive rates and occupancy of the small properties on the island, and also by the number of people who like Anna Maria so much they come back. Since 2009, 80% of the guests at the current hotel condos on the property, Beach Inn, are repeat clients, say Mainsail officials.
Because the economy was still struggling, Mainsail decided to sit on the property and keep the Beach Inn running for a couple years. The company secured financing, passed zoning requirements with the municipality and was able to get its resort plans accepted into the Autograph Collection. Finally, after two years of “legal wrangling and mediation,” says Collier, Mainsail has achieved site plan approval and is ready to start construction.
The Waterline Marina Resort and Beach Club will be built with a marina, restaurant, bar and hotel, and is expected to open next fall 2016. It will be the only full-service hotel on Anna Maria — and after all of the property's delays, executives at Mainsail are pretty sure it's the first and the last.
Fairytale Story
Mainsail's beginning is somewhat of a fairytale. Collier started the business in 1998. While working for Marriott, he acted on an opportunity to provide a residential-style hotel for PricewaterhouseCoopers' international training facility. He later purchased a franchise from Marriott's ExecuStay, which provides corporate housing and relocation services.
Mainsail now has 1,000 corporate housing units in the Southeast, covering Florida, Georgia, North Carolina and South Carolina. The company's temporary furnished housing units have provided lodging for entities ranging from Cirque Du Soleil to MacDill Air Force Base to Deloitte.
Collier entered the resort management world through a stroke of luck in 2003, when he and his wife sailed up to a remote island in the British Virgin Islands. After sharing drinks with the owner of the island, the couple thought it might be possible to develop a resort there. After a few months of courting, the couple persuaded the owner to develop the 230-acre island, eventually buying her out.
But the fairy tale hasn't been without its scares.
Here's one: When the PricewaterhouseCoopers lease was coming to end, Mainsail decided to build a 20,000-square-foot conference center and training facility in Tampa. After spending significant money — Collier declined to say how much — on building the complex, the company realized the property would work better as conventional apartments. Says Collier: “That had a lot of passion, too, but it tanked.”
While Collier admits that move was a bad business decision, the company has been able to sell 678 apartment units from this complex and another complex in the last few months. The firm declines to release sales figures on those units, or for the company.
When Marriott sold ExecuStay to temporary and corporate housing firm Oakwood, Mainsail didn't know what to expect regarding changes to the structure and culture, particularly the franchise model.
Sticking it out proved fruitful. In September 2013, Mainsail became the first franchisee from the Oakwood brand; now Mainsail owns three franchise territories.
The company has also just completed an extensive debt modification on Scrub Island after being forced to seek court protection following a bankruptcy dispute with FirstBank Puerto Rico. Now Mainsail executives are excited about the $18 million it has invested there, and is ready to grow that property, Collier says.
The company's biggest challenge going forward is determining the best opportunities. Mainsail isn't just looking for any property up for sale, says Brian Check, head of development. But it also isn't constantly looking over its shoulder at hotels across the street. “You're not going to find a Bern's everywhere, that's not easy to come by,” Check says.
It's a good time to be in the business as far as financing goes, Collier says. The challenge there, he says, is “streamlining the vetting process and finding the proper sites.” The company is now looking at two other properties, one in a more historic area and another as new construction, Collier says.
Even as the company grows, Collier says the culture of stubborn passion won't change. “Mistakes are going to happen,” he says. “It's OK if made for the sake of growth.”
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