Rising property taxes and insurance
costs are affecting businesses across Broward County, with
small hotels and inns taking an especially hard hit.
BY JENNIFER LEBOVICH
jlebovich@MiamiHerald.com
Business has been brisk at Liberty Suites in Dania Beach.
But despite a record number of visitors to the 18-unit hotel
this year, the owner predicts that when all his bills are paid
he'll barely break even.
''We are seriously thinking about making this our last
season,'' said Joe Van Eron, who has owned the hotel with his
life partner, Jack Zimmerman, for nine years. ``This is our
livelihood. We built our retirement on this. We're getting to
the point where we're constantly working for nothing.''
For years, rising property values and tempting offers from
developers have led dozens of small, relatively inexpensive
Broward hotels to close, making way for new high-rise hotels and
condos.
Some have hung on. But now, rising property taxes and
insurance costs, coupled with higher electric bills, are cutting
into profits and leaving many with little choice but to fold.
Many of the small hotels that line U.S. 1 or A1A through
Broward County and sit in clusters near Hollywood and Fort
Lauderdale beaches offer quirky slices of Old Florida. Some
cater to Canadians or Northeasterners; others, such as Liberty
Suites, market themselves to gay vacationers. Rates are usually
lower than at large hotels, and many have kitchens that attract
people for longer stays.
This year, Van Eron had to raise rates about $50 a week to
help cover rising costs. He has seen drastic increases in nearly
every bill he pays.
NO CAP ON TAXES
Unlike for owner-occupied homes, there is no cap on how much
taxable value of business structures can increase each year. So
in the past five years, Van Eron's property taxes have increased
by about $12,000.
Insurance costs have gone up by roughly $9,000.
''You get to the point where you say how much can you add to
a room rate and still be competitive?'' Van Eron said. ``You
have to absorb it.''
Since 2000, about 50 hotels have closed in Broward County,
said Nicki Grossman, president of the Greater Fort Lauderdale
Convention & Visitors Bureau.
The bulk of them were smaller hotels.
Despite some smaller hotels going out of business, there are
1,500 more hotel rooms in Broward County than in 2000.
BIG GUYS GET BIGGER
''The face of our business has changed,'' Grossman said.
``Instead of having a larger number of small properties, we have
more rooms in the larger hotels.''
There are about 200 small hotels -- with 50 rooms or fewer --
in Broward County today.
''What we've seen is the hotels that have gone out of
business have gone out because they sold their property to a
hotel developer or condominium developer,'' Grossman said.
``Some people in business in smaller hotel properties are making
the decision they'd rather cash in now.''
CONDOS MOVING IN
To the south, Sunny Isles Beach has undergone even greater
change. Many of the eye-catching, low-rise beachfront motels in
the northeast Miami-Dade County resort town have been demolished
to make room for high-rise condominiums. Along the Collins
Avenue strip, condominium construction was too lucrative to pass
up.
Many of the small innkeepers who remain pride themselves on
unique properties and service.
Mahogany furniture and trinkets from the Keys welcome
visitors at the Ernest Hemingway suite at Estoril Paradise Inn.
''There's absolutely personalized service,'' said John
Ambrosio, who with wife Aileen runs the 16-room inn and the
neighboring four-unit Ambrosio's Inn. They know the guests by
name, and many come back year after year to the hotel, whose
rooms sport a variety of interiors.
''It's the uniqueness, something that's different from
everyone else,'' said Ambrosio, who is on the board of the
Florida Superior Small Lodging, a trade organization.
Members' big concerns, he said, are loss of business from the
hurricanes of the last two years and increasing property taxes
and insurance costs.
''I think we're all trying to stay and do the best we can,''
said Ambrosio, who saw taxes on his buildings rise 40 percent
and 200 percent over the past couple of years. He added $5 to
$10 a night to the room charge to help offset the added
expenses. ``If we sell, what else will we do? They're in it for
the long run trying to do the best they can to make the business
survive before selling. I think pretty much that's most of us.''
Small hotel owners have, like many in Broward, come to appeal
their property tax bills. But Bob Wolfe, a spokesman for the
property appraiser's office, said there is often little the
office can do. As land surrounding these properties is
developed, the values of the property rises.
''If right next door, land is selling for prices we're
assessing it at, it's tough to play with those numbers,'' Wolfe
said. ``Our job is to report market values. I know that puts
people under the gun who run a small motel.''
Wolfe pointed to Lauderdale-by-the-Sea, where a number of
small hotels along A1A have been razed, with condominiums
planned in their place.
When Donna Boucher and her husband Dwayne got the tax bill
for their 11-unit Manta Ray Inn they had a tough decision to
make.
''This year when we got tax bills we either had to close the
doors or raise the rates by 10 percent, and that doesn't cover
it,'' said Boucher, who reports a property tax hike of 102
percent over last year. ``You can't cut down on quality of
service.''
DEMAND IS THERE
Running the beachside inn is a 24-hour job. She said she
hasn't had trouble attracting people to the hotel.
''People want a place with a kitchen, a little more unique,
where they can feed their kids breakfast and lunch and go on the
Broadwalk for dinner,'' Boucher said. ``Hollywood has that.
Unfortunately, it's just getting too expensive. The customers
are there, but we just can't make ends meet.''
The two came from Ontario about 15 years ago and bought the
inn overlooking the Hollywood Beach.
''We love it here, but taxes are going to force us out of
business eventually,'' Boucher said. ``We cannot pass a 102
percent increase onto customers.''
© 2006 MiamiHerald.com and wire service sources.
All Rights Reserved.
J
