City Council to Ponder Hacienda Hotel Agreement Tonight

The company with which New Port Richey has been discussing the redevelopment of the Hacienda Hotel to convert the shuttered historic building into a modern hotel.

So now what?

That’s what the city council is being asked to weigh in on at a work session tonight, Dec. 13.

City council members can't vote at a work session, but they can share opinions.

According to a memo from City Manager John Schneiger, the Georgia-based company did not respond to the proposal by the Dec. 1 deadline.

“While CDP did not meet this deadline, it is staff’s impression that every effort was made to do so,” according to the memo.

Schneiger is recommending that the city give the developer as much as 60 days to work with staff on “unresolved issues” in the agreement.

What's in the Draft Agreement

In October, city staff sent Community Development Partners a draft agreement to ultimately gift the deed to the Hacienda Hotel to the developer.

First, the developer would need to rehabilitate and expand the downtown landmark and provide or find financing for the project. Once the work necessary to open the Hacienda as a midscale hotel was completed, the city would give the deed to the property and the land on which it sits to the developer.

Work on the site would include:

• Renovation and refurbishment of the interior of the building
• Construction of a tower to up the rooms to 93 and house related amenities
  
• Restoration of the building exterior

The agreement would need to be signed off on by the developer and the city Community Redevelopment Agency, or CRA.

The agreement would set specific milestones and deadlines for the project.

One condition of the agreement calls for a separate agreement that identifies opportunities for New Port Richey to get some residual from the profits the developer or operator realizes from the hotel, according to Schneiger. Another is that the city provide offsite parking in a separate agreement.

The Hacienda, which is on the National Register of Historic Places, and has been vacant since 2006.

The CRA agreed to buy the 55-room building for a little more than $2.2 million in 2003 from Gulf Coast Jewish Family Services, which operated an assisted living facility out of the building after the hotel shut down.

New Port Richey has been discussing the Hacienda’s redevelopment with Community Development Partners for years.

A preliminary development agreement with the firm expired in 2010, according to Schneiger’s memo.

According to Schneiger, a concern of city staff is the risk of working exclusively with one developer.

"It is for this reason that the intent of development of any future term sheet is to include risk and cost that is better shared between both parties," according to Schneiger.

Expansion Needs Direction

In August, the city attorney offered a legal opinion that a proposed northward expansion of the hotel would encroach into a section of Sims Park and put the project “in conflict” with a city ordinance that effects that section.

According to Schneiger’s memo, a “major obstacle” for Community Development Partners is receiving feedback on expanding in a direction other than north. 

The major options are north but with added height to stay out of Sims Park, east into Bank Street and the Gloria Swanson Parking Lot or west, into a different section of Sims Park.

A westward expansion would put the project into the path of the wooden Super Playground and the Sims Park restrooms. The playground would need to be removed and the restrooms would likely need to go, as well. An analysis by a loss prevention consultant states the playground is unsafe, according to Schneiger.

Since the building is on the National Registry of Historic Places, the expansion needs approval from the state Office of Historic Preservation and federal Department of the Interior, according to Schneiger.

On Dec. 7, the city received word that the state Office of Historic Preservation said a westward expansion “may possibly be acceptable” and expansion in the  north or east “would most likely not be acceptable,” according to Schneiger’s memo. Final say is the responsibility of the Department of the Interior.

When discussing the issue of a westward expansion in August, city council members mentioned previous controversy about a proposed expansion that threatened Super Playground. However, they gave the green light for negotiation with the developer.

The developer's first choice has long been to expand west, according to Schneiger.

“At this point, it is unlikely that we will have anything formal related to our ability to expand in a westerly direction by December 13,” according to Schneiger. “In fact, we may never receive such and the project may cease to be viable.”

The city ultimately needs to prepare a policy “that accepts the tradeoffs required to expand in a westerly direction,” according to Schneiger's memo.

It would make the most sense to develop a Sims Park master plan that would identify locations that the playground and possibly restrooms could be moved to.

Schneiger said Community Development Partners has been told that a decision on the agreement needs to be made in the near future. He wants to give the firm until the end of January.  

The council will take up the issue when it meets at 6 p.m tonight at City Hall, 5919 Main Street, New Port Richey.