“Antagonist in Chief”, Jeff Southmayd, raises the ante with a challenging letter to Salamander president, Prem Devadas. Devadas’s fact-based response to the challenge was likely unexpected.
Palm Coast, FL – December 21, 2014 – The conflict over whether or not Salamander should be allowed to build a 198 room lodge-hotel on the same spot occupied by the existing lodge is heating up. The stakes are high, with $72 million in capital investment , plenty of local economic impact and several jobs on the line.
The well organized group formed to stop the project rallied about 50 blue-shirted supporters to two successive P&D Board meetings. The group is also reportedly reaching out for professional marketing assistance. Their "Antagonist in Chief," Jeff Southmayd, recently wrote to the individual members of the Board of County Commissioners.
From: JEFF SOUTHMAYD-PD <firstname.lastname@example.org>
To: cericksen <email@example.com>; fmeeker <firstname.lastname@example.org>; brevels <email@example.com>; nmclaughlin <firstname.lastname@example.org>; ghaans <email@example.com>
Sent: Wed, Dec 17, 2014 9:31 pm
Subject: The Proposed Salamander Hotel on the Plat Restriced (sic) Open Space Next to Old Salt Park
The Christian community in Flagler County is very concerned about this proposal since it appears to sacrifice the rights of the county residents to the desires of private developers.
Please contact me for a media interview.
If I don't hear from you, I will assume you side with the developers and aren't concerned with the local county residents (sic) needs and interests and will report the story accordingly.
[Toby’s comments: The parcel is plat restricted, however, the county staff, in its recommendation to approve the project, determined that the plat restriction does not apply to the proposed structure. Signing the email as president of a Christian radio station, Southmayd suggests that he speaks for the Flagler County Christian community. I doubt that he does.]
A recent exchange with Salamander president, Prem Devadas, is more enlightening. Southmayd challenges Devadas with several slanted and disingenuous questions and rumors (many of them likely started by Southmayd or his group).
Devadas response is polite, in stark contrast with Southmayd’s tone. The juxtaposition of questions heavy on innuendo and light on facts with Devadas's complete and factual answers is enlightening. And Devadas chose to speak in his reply not only to Southmayd, but also to the entire Hammock Beach Club membership, a move unlikely anticipated by Southmayd.
GoToby.com is firmly in favor of the Salamander proposal. Southmayd’s group has been successful until now in framing the issue as a choice between the status quo and an intrusive hotel on the beach. After reading the following exchange, you will understand why the status quo is unsustainable. The financial well being of one of the county’s largest employers and economic engines is at risk. Its future and the future of Flagler County are at risk as well.
The Board of County Commissioners will take up the issue January 12, 2015. If they cannot approve the Salamander plan, one should wonder what they would approve. I urge you to contact the BOCC (Southmayd conveniently provides their email addresses in the email header above) and let them know what your thoughts are.
Southmayd – Devadas Exchange
Recently, I received a note from one of our members, Jeff Southmayd, advising me of numerous rumors being circulated about our Lodge proposal and posing several questions to me for clarification. Because the majority of issues which he raised pertain directly or indirectly to our membership, I felt that it would be helpful to share my response to him with all of you.
Below please find my responses to the questions which you sent me last week. Thanks for your patience. I have been traveling this week and just returned to Middleburg.
- It is rumored that in the event the hotel project is denied there will be an increase in the club membership dues, but if the hotel project is approved we will never receive such a dues increase as long as Salamander/LA manage/own Hammock Beach?
With regard to increases in membership dues, I have publicly stated in several meetings that there will be no attempt to increase dues as a result of the many improvements to member facilities and services that we propose as part of the new Lodge development. Furthermore, I have stated that there will be absolutely no member dues increase during the New Lodge construction period. After the New Lodge is built, any future membership due levels and associated increases would be of a normal, inflationary nature unlike the recent 7% increase that has occurred at the Hammock Dunes club. The positive economic impact created by the new Lodge will ensure that Club operations are stabilized and can grow, which is the best way to ensure that future assessments and abnormal increases in dues can be avoided.
If the new Lodge is not approved, we will continue to use our best efforts to minimize future member dues increases. However, if we cannot find a way to fund necessary improvements, which is a stated objective of our new Lodge proposal, deferred maintenance of the facilities and the golf courses will catch up to us sooner rather than later, and we will be forced to take necessary action to keep the Club viable, which may include significant increases in annual dues
- It is rumored that in the event the hotel project is denied, Salamander will terminate its management of HB and we will be faced with a new management group who might not do as credible a job here as you all do?
Salamander's goal from the very beginning has been to operate Hammock Beach on a long term basis. We believe that the resort and club can be known as one of the finest of its kind in the country if a sustainable solution can be found to address current financial challenges. We have a vision for the Club's future, and as experts in the luxury hospitality industry, we are certain that the development of the new Lodge is the only viable way for us to accomplish this. We also have developed strong relationships with many of our members and have grown fond of Hammock Beach.
Having said that, like most other hotel companies, we have standards that define our luxury brand, and at some point, if the condition of the physical property prevents us from delivering on our brand promise, then we must make necessary decisions to protect the integrity of our brand, which could ultimately include the termination of our relationship with Hammock Beach Resort. We want to do everything possible to avoid reaching that point. I should also add that based upon Salamander's reputation, we have succeeded in reestablishing Hammock Beach in the prestigious Preferred Hotels and Resorts collection. Each year, Preferred conducts an inspection of their properties to ensure compliance with their physical and service standards. I am very concerned that they will require us to commit to improvements soon or risk being removed from the collection. This should be concerning to others in the rental program because they function as Hammock Beach's booking engine and a key generator of group business leads.
As you may know, our team has recently achieved accolades for Hammock Beach Resort from Travel & Leisure Magazine Readers Poll as the top resort in Florida and #5 family resort in the United States. And we were just informed this past week that Golf Digest's Best Golf Buddies course rankings list our Nicklaus Course #11 and the Conservatory #13 among all Florida courses. Our team continues to work hard to make Hammock Beach the best that it can be, but we cannot sustain these accomplishments without significant improvements. This should be a matter of great concern to any Hammock Beach property owner who cares about their long term membership and property values.
- Are Salamander and LA willing to enter into a written contract with the property owners in Ocean Hammock, Northshore and Hammock Beach and the club members that will specify the exact improvements that will be made in the event the hotel project is approved and the proposed timing for the implementation of those improvements?
I have stated many times that we are willing to have a written legal agreement with property owners which confirms our commitment to making the many improvements to existing facilities which will be triggered by County Approval of the new Lodge and the new Club facilities that will be available upon the opening of the new Lodge. As you may know, these improvements have already been outlined in writing within the Town Hall Meeting notice which we sent to all property owners in March and which I reiterated during our presentation to owners on April 5, which as you know has been recorded and made available to all owners. Furthermore, our original application to Flagler County's Planning Board which we filed in August includes the very same commitments to these improvements.
- It is rumored that Salamander/LA have been operating HB at a significant loss since Salamander came on the scene (operating expenses exceed income/revenue from all sources) and without the hotel Salamander's presence here is not sustainable. Are you willing to allow me and a group I chose of CPA's who are members to review your operating statements? I think you made this offer to me at the HCC meeting.
Contrary to this rumor, I have stated in many public meetings, including County Planning Board meetings that Salamander was successful in turning "staggering losses" which we inherited at the end of 2011 into a marginal profit at the end of 2012, thus stemming the bleeding which threatened the Club's viability. In turn, we have reinvested this modest cash flow to make necessary improvements, primarily to the golf courses, including the new greens at the Conservatory which had received many negative comments from members and guests over the past few years. We also reserved $400k as our contribution to the much needed lobby renovation. Perhaps most importantly, we were able to give our outstanding staff much deserved wage increases after several years of wage freezes under previous management along with the reinstatement of benefits and performance bonuses for deserving managers. Unfortunately, we will not generate as much profit in 2014 as in the previous year because of the drop in group business caused by the deteriorating state of our facilities coupled with the hundreds of millions of dollars in recent improvements by our competitors, particularly Amelia Island Plantation. Even while our team has achieved award winning accolades for lodging and golf courses and our family leisure business in the larger rental condos has increased, the continued loss of group business, which is the most profitable revenue center for any destination resort, will ultimately put us back in the red if we don't find a way to become more competitive.
I must also correct your comment about my offer to you at the HCC meeting. There was no discussion about sharing operating statements. In response to you publicly questioning my word about our agreement to invest with Lubert Adler in Hammock Beach, I offered, in front of the entire group, to sit with you privately and show you the section of our contract pertaining to the investment. All I asked is that you come back to a future HCC meeting and let everyone know that my statement about this is factual. At the time, you declined my offer, but please know that the offer still stands.
- What is the status of the HB lobby remodeling project that I understood would start in the Fall 2014? Has it been abandoned?
As I mentioned in the previous section, we have reserved $400Kto enhance the lobby renovation. Our interior designer, who also designed world class lobbies with me at the Sanctuary at Kiawah Island and Salamander Resort in Middleburg, has visited Hammock Beach and we have agreed to a contract for her design services. We have been ready to work with the Association Board to design and execute a significant lobby renovation for months. Unfortunately, despite our best efforts, and up until a recent discussion on November 20, 2014 with Tim Digby, the current property owner Board Members of the Association have chosen to not engage with us about the renovation other than proposing an onerous agreement to us a few months ago which, among other things, sought to limit rights of usage which the resort guests and club members who we represent currently enjoy. I am still hopeful that we can move forward with the Board and combine our resources to elevate the resort and Club, but I am not sure what we can do short of only addressing the portions of the lobby which we control such as the bar, retail shop and reception areas. Honestly, I have never been faced with a situation where I offered funding to help improve common areas with no strings attached, and that offer was not accepted.
- In the event the hotel project is denied will Salamander/LA undertake the renovations of the Lodge, fitness center and spa that is needed to return the facilities to "first class" status which I understand is the only way in which Salamander operates, or will they be allowed to continue to deteriorate?
The approval of the Lodge holds the key to our obtaining additional funding to refurbish those areas which you mentioned in addition to restaurants, bars, and enhancements to the existing golf halfway house, all of which are addressed in our proposal. Additionally, the new Lodge proposal gives us the opportunity to develop new member-only facilities which are incorporated into our current design. Without a new business plan that includes the new Lodge, there is no renovation financing available for a resort that is barely generating cash flow.
Nearby Amelia Island Plantation provides an excellent case study of what I am describing. The previous resort owner was unable to obtain financing to make improvements to facilities which were in dire need of renovations. Conditions deteriorated over several years, and the resort and club fell into bankruptcy in 2010. The property was subsequently purchased by Omni Hotels on the premise that if they could add additional hotel rooms and conference space to the existing resort, they could make it a viable business and feasibly enhance the club's amenities. In early 2013, Omni completed an expansion which included the addition of 155 guest rooms that were incorporated into three new six and seven story tower buildings, adding to the existing 249 hotel rooms; they also increased their program by adding another 30,000 square feet of conference space. Their plan is working, with recent articles reporting that hospitality revenues, driven by higher occupancy and rates, have significantly increased at Amelia Island in 2014. Furthermore, their owners’ rental villa occupancy has increased, and real estate values are on the upswing.
Our Lodge proposal is much more modest in scale than theirs, but because our plan incorporates larger and more luxurious guest rooms, we can charge higher rates and generate financeable income with less rooms and conference space. It would be worthwhile for you to better understand what has happened at Amelia, a real life scenario just up the road.
- In the event the hotel project is approved, is Salamander/LA willing to refund the membership fees paid by members to join the club who don’t support the project in the event they want to terminate their memberships and promptly after such notification?
Hammock Beach Club Membership Bylaws govern our policy making, including the rules pertaining to membership deposit refunds, and Club Membership Agreements explain membership resignation processes. Consistent with practices which exist today, any deviation from, or change in, current bylaws involve careful review and thorough analysis, evaluation, and discussion. We will continue our practice of keeping members informed and solicit input as we form policies and make important decisions.
- Does Salamander/LA have any plans to complete the construction of the Fred Couples Golf Course at The Gardens At Hammock Beach? If the hotel were built at that location would the golf course be completed and made available for the use of the members as promised by LA in 2006 when it purchased Hammock Beach?
Salamander does not have a contract with LA to manage the Gardens or any other properties outside of the Club, so I have no knowledge of their intent with regards to the golf course you are referring to. I suggest that you speak with Daniel Baker, who I am sure will respond to your question.
I will say that we would never be involved with a hotel development at the Gardens. The new lodge proposal is feasible because it incorporates the existing one bedroom condos, which are walking distance, to create enough accommodations to attract larger groups. Furthermore, it incorporates the existing restaurants and bars, spa and recreational amenities, all of which are within walking distance. A stand alone luxury hotel development would require a much larger lodging facility, with 325 guest rooms, substantial conference space and a replication of amenities. The cost of this would be prohibitive, and without the benefit of ocean views, the rates and occupancy projections would be much lower than our proposed plan, making it impossible to finance and obtain funding for the necessary improvements to the existing Club amenities. Alternatively, I suppose that someone could feasibly develop a limited service hotel like Hampton Inn, Days Inn or Marriott Courtyard, but this would certainly not support golf course development. We would have no interest in something of this quality level.
Jeff, thanks again for giving me an opportunity to respond to the rumors you shared with us. We continue to communicate with all interested parties and stakeholders, and would like factual information to be the basis of opinions and judgments regarding the New Lodge plan. Hopefully our most recent revisions to the plan, which were discussed at the December 9th Planning Board meeting, demonstrate our commitment to integrate additional value and benefits. For any of your group that may not have seen the most current plan, it includes the following most notable changes:
- Incorporation of an environmental donation of $2 per guest room night at the New Lodge. This financial contribution will enable achievement of environmental conservancy to a level previously never realized locally, with an estimated annual contribution of more than $100K.
- Shifting the New Lodge buildings 15 feet further away from the dune than the existing Lodge building, which is situated on the CCCL. This will provide additional dune protection, allow additional dune restoration, and provide further buffering from the beach for any nominal shadowing or lighting concerns.
- Elimination of the provisional parking lot on the south side of 16th Road and an offer to also eliminate the 35 committed parking space area also proposed south of 16thRoad. Thus no disturbance of vegetation.
I trust this information is helpful. As always, please feel free to contact me should you have additional questions.
Salamander Hotels & Resorts
10 N. Pendleton Street
Middleburg, VA 20117