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.
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?
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