Principals with Orlando-based Elevation Development have spent the past year cleaning up a run-down motel west of Downtown Orlando, and are now considering a conversion to affordable apartments.
Located at 4919 W. Colonial Dr., just east of an intersection with C.R. 431, the 4.6-acre property was bought by an Elevation affiliate in July 2016 for $1.5 million, and was formerly known as The Palace Hotel and Resort and the Jayma Ambe Hotel.
The new owners began stabilizing the property immediately after buying it, with rehab work started last October and more than $800,000 invested thus far, said Owais Khanani, who invested with Elevation partner Shaman Foradi. Another $700,000 is expected to be spent on renovations through December.
Rebranded as the Magnolia Hotel with weekly rates around $190, the partners are exploring a potential conversion of the 214-key motel to affordable apartments endorsed by the U.S. Department of Housing and Urban Development (HUD), which helps apartment owners offer reduced rent to low-income tenants.
"We're working towards an apartments conversion and learning all the steps involved in that, we'll see if we can get the proper rezoning to support that," Khanani told GrowthSpotter. "Right now we're just going through a massive rehab of the entire property, with a lot of work underway. The hotel is partially open now with some weekly renters."
The motel was in the news often for police calls prior to its sale last year. Elevation has "taken steps to clean up the tenant mix to insure such things don't happen again," and will spend more than $200,000 annually on private security for the property that has reduced police calls, Khanani said.
"Our core business is new development. The only reason why we got involved in this project is because we wanted to give back to the community, and we know we can make a difference in the area," he said.
"It’s not the highest rate of return and not the easiest deal, but we like the area and ... thought it was a good opportunity to help turn it around, so we’re more than happy to do that.
"If we get support from the municipality, that will expedite our efforts and more importantly it will encourage other property owners to take the same action as we have, to reduce crime and rebuild the area."
An 11,000-square-foot restaurant building separate from the motel is also on the property, currently closed. Elevation will pursue remodeling of that building after work on the motel is complete, with an eye on drawing in a restaurant tenant, Khanani said.