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Daytona Shoreline Hotel Tycoons File for Chapter 11

The article titled "Daytona Shoreline Hotel Tycoons File for Chapter 11" was published in Orlando Sentinel September 13. This is the latest bad news in the saga of the slow real estate market. This time it hit the developers of many hotels in the area, inlcuding The Plaza Resort & Spa.

Charles Bray & Joseph Gillespie came to Daytona Beach area in 1998, at the time of a slow market like today's, but they had a vision and grandiose plans. Actually nobody else had a vision like they had for Daytona Beach oceanfront. They drove the beach, and Atlantic Ave then was not a pretty site, but they not only had the money, they could see beyond the rundown properties on both sides of the street, and saw the potential, and saw the future.

The Plaza Resort & Spa. Daytona Beach

They courted the owner of The Plaza Hotel, an imposing, though bland historic hotel in the heart of Daytona Beach, for several month, until he finally agreed to sell the hotel, which was not even for sale at that time. They spend $70 Mil on this flagship property, and it is a beautiful hotel.

Hungry for the properties, they were buying one hotel after another. In that frenzy they did not care that they lost a few properties after hurricane Charley and Frances in 2004. Some were demolished and only a 228-room Treasure Island still stands empty as a reminder of this acquisition rush.

In a hindsight Bray & Gillespie were the best thing that cold happen to Daytona Beach. These two guys had a vision and the energy never seen in Daytona Beach before. The plans for the Blu, a 33-story Hotel in place of former Beachcomber, plans for 42 The Grand just south from the Plaza Resort & Spa, all that is now in limbo. It is such a bad news for Daytona Beach, and I am sadden by it.

There are a lot of people who do not like Bray and Gillespie. Small dogs always hate big dogs. I am not saying they angels. I do judge them for what they were capable of, and what they could bring to the area, with that combination of business sense, entrepreneurship and vision.

They are shrewd hoteliers. I would not be surprised if their occupancy rate is the highest in the area, and if not, it is one of the highest.

They converted a 322-room The Plaza Resort & Spa to a condo-hotel to get some needed cash at the peak of the market. Sales were so simple that they did not even need a real estate broker.

The sales stopped abruptly when the market started cooling off, as the price per sq. ft. reached the highest in the area reaching about $900 psf. As if someone pressed the brakes. It did not bother the developers, as they sold 2/3 of the units and could pay off the expenses on very extensive remodeling.

I never met Chuck Bray. I once met Jjoseph Gillespie. He is an impressive guy (could play basketball with his height, maybe he even did when he was younger). It was a year and a half ago, and at that time Bray and Gillespie's empire looked strong. They did not have any problem getting money. The Wall Street liked them to the tune of close to a billion. Those power monsters of Wall Street are no longer there. And the value is no longer here. At least it is not here today

I can't and I do not want to blame them for falling prey to the weakening real estate market and the equity that is disappearing like dry sand through the fingers. Bigger guys went belly up just recently. I am simply afraid that Daytona may lose them. I can only hope they can survive. 6 miles of Daytona Beach Oceanfront that they own now could become the new South Beach, and I am longing for this to happen.

I just recently sold two units in The Plaza Resort & Spa. What will hapen to the owners with all that bankruptcy? I do not have a clue, it never happened here before. What do I tell my clients?

Posted by Jon Zolsky, your Daytona Beach, Florida connection on 09/18/2008 12:53 AM

Comments (11)

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Originally posted at: Jon's Blog: Daytona Shoreline Hotel Tycoons File for Chapter 11

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11 Comments on Daytona Shoreline Hotel Tycoons File for Chapter 11

SEP

2008

Since a Chapter 11 is basically a cram down on creditors, I imagine Bray and Gillespie will emerge smelling like a rose.

I think there is a good chance that Elizabeth is correct here. They so far did not lay off anyone. From what I hear from their employees, they do not look likegiving it all up.

Consider yourself lucky that you never met Chuck Bray. I can say without fear of contradiction and from personal experience, that if you asked 100 people their opinion of Chuck, 99 would give you the same answer that I'm about to give you. The one person who would disagree would be his mother.

You may say that I am only a small dog biting at the heels of an elephant and that's fine, but I personally know both Chuck Bray and Joe Gillespie. I can offer insights into their character that only a very few people could give. That insight comes from being in their inner circle and having 24 hour unfettered access to both men.

Chuck Bray is one of the meanest, vile, repugnant and obnoxious people I have ever known in my entire 52 years of life. He has disdain for everyone he comes in contact with. Make no mistake about it, Chuck Bray is the head of the snake that is Bray & Gillespie. He gives the marching orders and Joe Gillespie complies.

Joe on the other hand is the face of the franchise and for good reason. He is polished, smooth, sophisticated and affable. Joe is everything

Chuck Bray could never be. Joe has to put up with a lot of crap from Chuck Bray, but he always shuts up and does what he is told.

I disagree with your contention that Bray & Gillespie was the best thing that could happen to Daytona. Have you looked in the Volusia County Public Records over the last ten years? It's replete with law suit after law suit. Law suits that were filed by honest people who only wanted to be paid for services Bray & Gillespie contracted for. You may call these people dogs snapping at the heels of an elephant, but sometimes you have to shoot that elephant right between the eyes if it goes on a rampage and harms innocent people. You might feel differently had you not been paid for your services too.

I believe George Anderson and Tom Staed are the people who have a better vision of Daytona Beach. Unless you have forgotten, George Anderson developed Ocean Walk and it is his vision that brought it to life. Tom Staed always operated his hotels in a clean, efficient, well kept manner. He always took care of his customers and kept his properties in first class shape. As far as I know, both George Anderson and Tom Staed are true gentleman. Unlike some people in Daytona, they are not crooks and have always paid people they did business with. I don't think you'll find anyone in Volusia County that would disagree on those facts.

Hmm. Someone has a strong opinion of Chuck Bray. I know nothing about him. I just wanted to know if the Plaza ever fixed their plumbing problems. The last time I was there was at the Margarita Ball a few years ago. One of my friends had decided to drink all the margaritas she wanted and not have to worry about driving home, so she got a room. The frst thing I noticed was the plumbing problems in her room, and downstairs as well. But in her room, they were worse; assumedly because of being on a higher floor. I was just surprised that after all the money that went into making over the old "600 North" (LOL. So many memories) that they had some serious problems with the plumbing.

Lisa - I am breaking the order, as I will have to comment to my anonymus opponent, and it will take me some time, so I hope he/she will forgive me for some delay.

I actually do not know about the plumbing problem. This is not my key property, where I know sometimes things that I do not need to know. I think the property is in good physical shape and I do not think that they would not address the problems that can affect the guest stay for years.

It is interesting how different our memories are. you grew up here, I came at an age when 600 North meant very little to me. And today's school kids will have different memories of this resort. The same property, different memories. All depends on the point of view. That's what casing the disagreement with my so eloquent anonymous opponent, adctually not even the opponent, as I would not disagree with him/her in the way of their personal experiences.

Lisa, thanks for stopping.

OCT

2008

Dear anonymous commenter - I am awfully sorry I did not respond to your comment. I was thinking that maybe I should not do it because you did not reveal yourself. I suppose you have your reasons, even though it looks like you are hiding from me, not Gillespie & Bray, as I do not think they would have a problem knowing who stands behind the comment. Really, not that many people could say what you said about your relationship with them.

Unfortunately, I was caught in the everyday routine, and this task faded from my memory. Today I got an e-mail, which has nothing to do with this discussion, but it came through this blog, and I thought that whatever is written, stays with people, and when I think that the discussion is over, people can still find and read it, and in their mind this may be not over.

Of course, I am not disputing anything you said, whihc maybe facts, I just do not know that. I heard that Gillespie & Bray (and/or their company) were known for not paying contractors, I heard nasty things before. Again, I am not disputing this simply because I do not know that.

I am coming from a different angle. I am sure John Rockefeller was not adored by everybody, as well as the Vanderbuildts, Andrew Carnegie and many other individuals, who left an indelible mark on American History.

I am not linking Gillespie & Bray to those people. I think that this is the same phenomenon, though. If we look at the big picture, they have the vision, and the determination, and the ability to make things happen. On a closer level, if they are crushing people, is a different story.

I have to agree that I did not give deserved credit to Geroge Andersen, and I think I will write about him one day.

I hope you will read this comment, I would like you to read it. I know that you would not agree with me, but I need to explain why I said what I said. I am not trying to embellish things, I am trying to understand them and put in perspective without justifying, This is the reason that I did not delete your comment in the first place.

Thank you for commenting. I would love to be able to talk to you, and if you could call me or e-mail me to jon@beautifulFlorida.com, I would really appreciate that opportunity.

Thank you and, again, I am sorry for doing it so late

DEC

I also know them. They are pigs. By the way, his mother does not like him.

DEC

i knew them from 1985 in atlanta. there history is not what they say. they have a history of deceit and cheating. i think the term pig is more appropriate than elephant. history will not be kind to them. if they have enough hidden money out of the country, they will run. add assets subtract debt and they will be the largest bankruptcy in daytona history. the only real question will be how many people they take with them.

D - I did not and will not swing to discussing personal things. I do not care whether your mother likes you or not, and trying to make it a gossip is not going to happen.

Interestingly, you brave people hide your name. It is a symptom, isn't it?

By the way, if you want to comment, no anonymous comments. I will delete them. If you are afraid, then do not comment.

Mike - I guess you failed to see where the economy is right now. They are in the same situation as the rest of the people in that market. The size of the assests has no relevance here.

The lost equity is their problem. So far they have done one property in Daytona at higher than Daytona standards, so if History will have to judge them, there is a legacy. What are those critics and anonymous haters left for the history to judge?

Rockefeller was not a person who everyone liked. There were many critics. Where is John Rockefeller now in History, and where are his critics?

There are many people with money. Some nice, some not nice. Some leave a legacy, some don't. We may not love them but this is irrelevant for the history

DEC

jon an excellant response and i hope for daytona you are correct. i have the advantage of knowing more history than you. if you look at their supposed deal page on their web site the vast majority of those deals were done by joes cousin mark smith of savannah and i. chuck and joe were not atlanta developers. chuck was not even working with mark and i when most of those deals were done. they were done with henry silverman of cendant. joe had little or no input and they should not be listed to their credit. we were all part of the original days inn group and subsequent owner groups. i personally sold all the days inns in the daytona area in the 80's. i still know many of the people who dealt with joe and particularly chuck. i too can tell you from personal experience that chuck fits the descriptions of all those previous comments. their business ethics should in no way be compared to the barons of old. i have dealt with silverman, steinburg, kkr, jerry richardson,prime motor inns with simon and taub in its hay days, and the original cecil day in the 1974 oil embargo era. all of us have dealt with difficult times but most do it with class. i too have been a hotel owner and multable property owner and operator. we have all experienced downturns which if you will look have averaged about ever 7-8 years. the survivors are the owners with realistic debt structures, good operational skills, and well managed and maintained properties. i think time will tell both of us who is correct. i will watch with great interest as i am sure you will. your blog presents an interesting commentary on this story and i hope more people with knowledge will share commentary. i agree that no comments should be annonymous. anyone with a comment should be willing to stand by it. keep up the good work.

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