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Osceola County to enact moratorium on future W192 motel conversions

T2 Capital and its partners purchased the 295-room Baymont Inn across from Celebration. They already have permits to convert it to workforce housing.
T2 Capital and its partners purchased the 295-room Baymont Inn across from Celebration. They already have permits to convert it to workforce housing. (Handout)

The Osceola County Board of County Commissioners will vote at their next meeting to enact 60-day moratorium on all new motel and hotel conversions on U.S. 192 and will consider passing an ordinance that would outlaw them permanently.

“I would like to see us take a pause and make some standards so that we could go ahead and change our Land Development Code and make sure that the ones that are off the 192 — I think that’s perfect for conversion, and they will be great apartments,” Commissioner Viviana Janer said. “But the ones that are right on the 192 corridor, I don’t think will make a great place for apartments, because that’s not what you want to welcome your tourists to.”

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Janer raised the issue during the board meeting Monday afternoon and reached a consensus from her fellow commissioners to move forward with the restriction. The moratorium would apply to all new conversion projects within 1,200 feet of the centerline of U.S. 192, and it would be retroactive to Aug. 9.

Two hotel/motel properties on W192 have already been converted to workforce housing, and at least a half dozen more have been sold in recent years for the purpose of residential conversion. Discussions earlier this summer among the Osceola School Board regarding a possible school impact fee reduction for studio apartments led to fears that the county would be flooded with more conversions. The school board agreed last week to continue charging a standard multifamily rate, proposed to be $12,165 per unit, for studio apartments.

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Meanwhile, the county’s W192 Development Authority has been crafting a set of design guidelines and recommendations for motel and hotel conversions. The authority had discussed making the conversion a conditional use on some parts of the CRA district, but the county’s action takes it a step further.

County Manager Don Fisher said he’s had conversations with all of the commissioners regarding the conversion issue, and many have expressed concerns that residential conversions directly on the W192 tourism corridor harms the Kissimmee brand and the hospitality-related businesses. “The discussion I’ve had with many of you is is it ever appropriate to have residential right on the corridor,” he said.

The moratorium also would give the W192 Development Authority the time it needs to bring a second ordinance to the board later this year to implement design guidelines regulating conversions. Commissioners mentioned a few specific areas of concern, such as requiring that converted apartments have adequate parking, recreational amenities and full kitchens with stoves — not hot plates.

The sellers had hoped to redevelop the vacant hotel into a Wyndham Garden, but gave up on the project after COVID.

Some developers, including those who were eyeing the former Orlando Sun Resort and Magic Castle Inn, have already pulled the plug on their conversion projects.

The most active developer in the conversion space wouldn’t be affected by the moratorium or future ordinance. South Florida developer Carlos Balzola, who partnered with T2 Investments to convert the former the former Red Lion hotel on W192 into Maingate Apartments, told GrowthSpotter they already have building permits for conversions underway at the former Champions World Resort at 8660 W Irlo Bronson Memorial Highway and at the former Baymont Inn & Suites at 7601 Black Lake Road.

Balzola and T2 filed a Site Development Plan in June to convert the former 355-room Claremont Hotel right across from the Water Tower Shoppes at Celebration, into workforce housing. “We’ve already received comments and resubmitted,” he said.

Fisher said any project that doesn’t have an approved permit may be subject to the moratorium, depending on what commissioners decide at their Aug. 16 meeting.

South Carolina-based Styx Companies is wrapping up the conversion of a former Red Roof Inn and Quality Inn on the corridor. Those permits were issued in 2019 the company is now pre-leasing studio units.

Other property owners may find themselves in a deep hole. Marcelo Aramendi leads an investment group that recently paid $4.5 million for a former hotel at 2950 Reedy Creek Blvd. with plans to convert the shell of the building into roughly 145 apartments. His architect had a pre-application meeting in July with county planners, but no permits have been filed.

Another investment group had a pre-application meeting last week to discuss plans for converting the 150-room Clarion Suites hotel at 7888 West Irlo Bronson Memorial Hwy. in Formosa Gardens into workforce housing. In that case, the developers also wanted to build 150 additional units on an adjacent lot that was slated for a second hotel.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

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