A South Florida developer is planning to convert two blighted motels in Groveland into an apartment complex called "Milestone Hills."
Groveland Property Investment, affiliate of Miami developer Martin F. Ugarte and CRE broker Santiago Silva, paid $3.5 million last week for the the former Clermont Inn/Jay Jin motel and neighboring Jayma motel on U.S. 27 just east of the S.R. 19 and south of the Florida's Turnpike interchange.
Silva, a broker with Kubico Realty, told GrowthSpotter the partners plan to invest approximately $10 million on repairs and renovations to the 45-year-old properties. The plan has changed somewhat since the developer initially presented it to Groveland's City Council in September.
"We're no longer going to do a condo conversion," Silva said. "We will do a rental community instead. It's easier to get financing for rental."
The buyers agreed to a consent order with the City of Groveland, pending performance requirements, to waive code-enforcement fees and release liens on the property at 20339 U.S. 27 for a total reduction of more than $40,000. Most of the property was in unincorporated Lake County and completely surrounded by the city, so the agreement was contingent on the owner annexing into the city.
Silva said he met this week with Mayor-Elect Evelyn Wilson to assure her the new owners expect to start renovations well before the mandated six-month deadline. First they have to complete the annexation and rezone the property for multifamily use.
Lake County also reduced code enforcement fines against the seller that had been accumulating since 2013, according to documents filed at closing. The seller paid Lake County a combined $21,610 to settle the two cases.
"The place is in terrible shape," Groveland CRA Director Dan Murphy told GrowthSpotter. "The roof was failing. The walls were failing. I walked it, and it was pretty disgusting."
Silva said it's likely the roof will have to be replaced on one of the buildings, but for the most part the buildings are structuraly sound. The company is in the process of selecting an architect and general contractor.
"We understand the buildings and property are not in the best shape," he said. "We did our due diligence and took structural engineers through the buildings. They are in good condition and be redeveloped."
Two properties have a combined 388 rooms. The conceptual plan would be to convert three rooms into a two-bedroom, two-bath apartment, and to use two hotel rooms to create one-bedroom apartments. The developer hasn't settled on the unit count yet, but the total number of units will be between 150 and 160.
The restaurant space in front of one motel will be converted into a clubhouse for the residents. Immediate repairs will be made to the two pools, and the developers will add a playground and tennis courts. They also have to replace a sewer lift station that services the property, Silva said.
He and Ugarte haven't decided whether to keep the Marathon fuel station in front the motel. Their goal is to attract a supermarket, but they could settle for a new fuel station with a larger convenience store that includes grocery items.
Murphy said he wishes the developer every success. "We waived the $40,000 fine with the anticipation that it would be redeveloped," he said. "More power to them."
The same principals are also affiliated with GreenPoint Hotels, which bought and renovated the GreenPoint Hotel Kissimmee on W192.