Miami-based property investor Spencer Perl wants to convert the old Katerina Hotel Orlando into workforce housing, but the project proposes a mix of challenges.
At an Orange County Technical Review Group meeting, Perl said he is seeking to convert the existing 145-room motel at 830 Lee Rd. into a multifamily property that will serve lower income renters.
“Our goal here is to take an under managed and underutilized property and rehabilitate it for the benefit of the community,” he told county staff members Wednesday morning.
Hotel conversions are generally difficult projects to get across the finish line.
“To my knowledge, there have not been any successful hotel to multifamily conversions within the county’s jurisdiction,” Orange County Planner Nicolas Thalmueller, said in an email to GrowthSpotter.
At the meeting Thalmueller told Perl he would need to apply for a Small Scale Comprehensive Plan Amendment as well as a rezoning classification.
“My guess, as is the case with every hotel conversion I’ve seen, is they were unable to meet all the various standards of the conventional article rezoning district,” Thalmueller said at the meeting. “Things like recreational area, parking, setbacks and open space. You’re going to need numerous waivers for those code standards.”
The five-story motel was built in 1985 on a 1.76-acre parcel. Currently, the site is surrounded by other commercial properties including a car wash and the InTown Suites Extended Stay hotel. Its current owner, 830 Lee Road Investment LLC, is a company led by Svetlana Udalov. Records show the company paid $4.2 million for the property in 2016,
The purpose of a TRG meeting is to help developers identify what steps need to be taken to pursue construction of proposed development projects.
At the meeting, Perl said he is considering adding solar installations to the roof to lower the property’s carbon footprint. He added, the proposed workforce housing project would require traditional leases and security deposits.
“We would like to invest enough money into the property to justify in assigning yearlong commitments to the spaces,” he said.
Perl declined to share details about the project with GrowthSpotter. He is the son of Berndt Perl, who cofounded of the New York City-based real estate investment firm APF Properties.
“We’re taking what is currently an eyesore in the community and creating something not just better looking, but also more needed,” Spencer Perl said at the TRG meeting. “The reason we are looking in Orlando is because of the workforce housing shortage.”
Industry experts agree there is a strong demand for affordable housing and workforce housing units in Central Florida. But converting a hotel property is becoming more difficult Mark Vengroff, managing partner at One Stop Housing, told GrowthSpotter.
“Currently the real estate market is so inflated it’s making it truly impossible to build affordable housing,” Vengroff said. “If you’re buying at an inflated price, you’re doomed before you start.”
One Stop Housing has converted about 2,000 motel and hotel units throughout Florida into affordable housing for low-income renters.
Late last year, the company completed converting a shuttered TraveLodge on U.S. Highway 192 in Kissimmee into the Backlot Apartments, where rents start at $750 per month.
One Stop Housing, is also the midst of renovating the final building within its 200-unit Colonial Gardens hotel conversion project that used to be the Magnolia Inn and Suites at 4919 W. Colonial Drive.
The developer originally attempted to convert the Magnolia Inn and Suites in Orange County, but withdrew its application in 2019. Later, One Stop Housing annexed the property into the City of Orlando, where Vengroff said Orlando Commissioner Regina Hill supported the project and helped get it off the ground.
“Most builders don’t have appetite for this kind of product,” he said. “We built a sustainable model based on having our own maintenance security detail and our own contractor to keep our cost down, and in effect, roll cost saving back to the tenant.”