SIESTA KEY -- Richard Dear's Tropical Breeze Resort is listed for $36.7 million, a price tag that is setting up the property for high-dollar redevelopment.
Whether the change will sweep in under one buyer or evolve on the resort's multiple corners is still unknown, but island observers don't expect the old block buildings, painted turquoise and trimmed with white picket fences, to stay the same.
""They're gonna see some big changes,"" said Warren Hickernell, a real estate investor who has been buying up similar old vacation properties, renovating them and selling the units to condo-hotel investors.
The $36.7 million listing includes five noncontiguous components, each of which might end up with a different owner carrying out his or her own vision for a sliver of paradise.
David Jennings, Dear's broker at SKY Sotheby's International, said the package has attracted attention from major players, but he expects them to be dissuaded by the fact that the parcels aren't connected. Scattered over three acres, Tropical Breeze doesn't offer the space for something like a 100-room boutique hotel, he said.
Although it's a short walk from the Tropical Breeze rental office on Ocean Boulevard to the beach at the end of Columbus Boulevard, the collection of rentals in between could have very different futures.
Much will depend on what Sarasota County allows on some small lots that are packed way beyond what current zoning allows.
The largest piece is 1.6 acres, and it holds 43 rental units, or about five times the density allowed under current zoning.
Dear is listing that group at 86 Avenida Messina for $17.2 million on the assumption that the buyer will want to convert the units into condominiums.
Jennings said he believes that price, which comes to $400,000 per unit, is low enough to allow a developer to renovate and resell to condo-hotel investors.
But getting permits for renovation is becoming more difficult, Hickernell said.
He hired a lawyer to handle permitting for renovations on recent acquisitions like the Seaspray, a 16-unit vacation rental at 558 Canal St.
Hickernell and an investment partner recently bought the Seaspray and intend to keep it going as a vacation rental. They paid $4.35 million, or $271,875 per unit.
Hickernell thinks plenty of investors are still interested in condo-hotel properties. ""It's probably the best real estate investment out there because you get daily rental income. However, everything's a factor of price.""
Prices on the smaller components of Tropical Breeze are even higher, based on the redevelopment potential, Jennings said. At 94 Columbus Blvd., 10 rental apartments could make way for as many as six new town houses, he said. That's assuming the county would allow one duplex on each of the three lots, which cover little more than 18,000 square feet, Jennings said.
With a listing price of $5.5 million, a buyer who redevelops under that scenario would pay $916,000 per unit.
Such a price guarantees that Tropical Breeze's old block buildings, the turquoise ones, would be replaced by multimillion-dollar homes.
The scenario is similar at 124 Columbus Blvd., where four lots holding nine rental units are listed for $6 million.
The sale has businesspeople on the key talking, hotel owner Paige Hartmann said.
""There's somewhat of a real apprehensive feeling that's going to deplete more of our short-term rentals,"" she said.
""It's going to deplete village action,"" Hartmann said. ""If it's sold to an entity that decides not to run it as a small accommodation, there's some apprehension that's a real hit for the village area.""
Jennings said he has fielded calls from a variety of potential buyers, from an out-of-state restaurateur interested in buying just the resort's Beach Club bar at 5151 Ocean Blvd., listed at $4 million, to residential developers who want to leave Tropical Breeze as-is.
At least one party is looking to redevelop the whole collection, said Art Eckert of S.S. Appel, a Sarasota-based hotel developer who looked into Tropical Breeze himself several months ago.
Eckert declined to name the potential buyer, but he said the ""group"" might bring the ""whole area"" up to date -- if the county and residents association can be persuaded.
""God knows it couldn't stand Category 2-force winds,"" Eckert said. ""If they update the whole area, it's going to be a huge plus for Siesta Key.""
Source: Sarasota Herald Tribune