Last week, Palm Beach County officials selected a development team to build a new hotel to prop up the county convention center in downtown West Palm Beach.
It seemed an insane move, since thousands of empty condo units already crowd the South Florida skyline, including more than 350 unsold units in CityPlace South Tower, next door to the convention center. Logic -- and a previous post on this blog -- would suggest that the South Tower should be converted into a hotel.
But the truth is a bit more complicated. Apparently, the busted real estate market hasn't been kind to condo-hotels, either.
"Almost every condo-hotel building we've seen completed in the last four years has been a failure," says Jack McCabe, a Deerfield Beach real estate analyst.
There's no financing available for a conversion of condos into hotel rooms, McCabe says, and the rooms would be too expensive to rent out if they included kitchens and other amenities that convention tourists don't ordinarily need.
As for the existing Marriott near the convention center on Okeechobee Boulevard, McCabe says it doesn't have enough rooms and is not close enough to provide the "synergy" the center will need to compete with its peers in Fort Lauderdale or Miami.
All of which begs the question: Was there really a need for a publicly financed convention center in downtown West Palm?
"We've pretty much built everything we could overbuild," McCabe says. "Now that they've got the convention center up, they may as well make the most of it."
