1616-64 NYtimes-A Keys Resort Sells a Piece of the Nest The New York Times> Travel>Escapes>Journeys: A Keys Resort Sells a Piece of the ... Page 1 of 4
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January 28,2005
JOURNEYS
A Keys Resort Sells a Piece of the Nest
By CHARLES PASSY
' SLAMORADA, Fla.
ROGER BERNSTEIN has long considered the Cheeca Lodge & Spa, a tropical-themed
resort on this famed Florida Keys getaway, a kind of home away from home, an upscale
retreat he visits every few months to "drink lots of fruity drinks" and work on his tennis
game. So, this last year, Mr. Bernstein, a Miami lawyer, decided to take his passion for
the place to the next level.
He bought it.
Well, at least a small piece of it. Mr. Bernstein purchased a $355,000 studio unit— one
of 92 "resort residences" the decades-old Cheeca is selling as part of its conversion from
a traditional resort into a condominium hotel. It's a decidedly different sort of second-
home ownership: Mr. Bernstein and his wife, Erica, and two children— a third is on the
way— won't get to personalize their unit or even ctut in a washing machine. And they
can only use it 28 days a year; the rest of the time, they will be required to place it into
the resort's rental pool.
Still, he and his family get to swim in the resort's lagoon, get mud wraps in the spa and
play golf on the nine-hole par 3 course. Mr. Bernstein is also betting that his property
will appreciate. In the Florida Keys, where there's a limited availability of real estate
because of restrictions on development, housing prices have soared— more than 30
percent in 2003, according to Monroe County officials. "My philosophy is investing in
something you can enjoy," he said.
He is not alone. In recent years, one of the hottest trends among luxury resorts has been
to develop some kind of ownership program, offering high-end "fractionals" (fancy time-
shares), condominiums or even houses. Some projects mirror the Cheeca model — a
legendary property converting part of its rooms to condos. Others are being built from
the ground up as condo hotels. Among the resorts in Florida alone that have condo
projects in the works are Miami Beach's Fontainebleau Hilton, the Venetian Grand
Resort in Orlando and Fort Myers Beach's Pink Shell Beach Resort. But the phenomenon
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has spread to other locales, including Las Vegas (MGM Grand Hotel) and Chicago
(Trump International Hotel). Even the 200-year-old Greenbrier, in West Virginia, is
getting into the ownership game, establishing the Greenbrier Sporting Club, a luxury
development connected to the property that will eventually include 500 homes; lots
range from $400,000 to $2 million.
Even before its recent renovation, Cheeca was distinct among Keys properties for its size
a roomy 27 acres and the fact it offered hard-to-fmd amenities on this slender
chain of islands like a golf course designed by Jack Nicklaus and a sandy beach built up
on the notoriously rocky shoreline. Then there's the blue-green water that has always
beckoned snorkelers, scuba divers and sport fishermen to the Keys.
The location "is an hour and a half away from Miami Beach, but it's like being on a
Caribbean island," said Cecilie Jorgensen, who with her husband, Kent, bought two
adjoining units at the hotel for $1.1 million last year. Adding to the feeling of remoteness
is the fact that there's only one road that connects the Keys to the mainland. Which may
explain why some Cheeca buyers opt to arrive on the resort's helicopter, which lands on
the golf course.
THE lodge, now managed by RockResorts, was built in the early 1960's after a hurricane
destroyed its predecessor, the Olney Inn, where Harry S. Truman was once a guest. The
name was derived from a merger of the names of the two new owners, Cynthia (better
known as Che-Che) and her husband, Carl Twitchell (an heir to the A.& P. supermarket
fortune).
The resort soon took on something of a celebrity cachet. Frequent guests included Sam
Snead, Ted Williams and Bing Crosby. More recently, former President George Bush
has often been a guest— so much so that the resort holds an annual bonefish tournament
in his honor.
But in the last decade, as luxury resorts proliferated and spent millions trying to top each
other with new amenities, it also became clear that Cheeca was no longer meeting the
high-end standard. You can tell as much today when you step into one of the resort's
remaining unrenovated rooms: the yellow wallpaper would be more appropriate in a
Florida motel room of the mid-50's than in an upscale resort of the new century.
The rest of Cheeca, however, tells a much different story.
With an architectural style that blends West Indian and Floridian influences, the resort,
consisting of a main lodge, several two-level buildings and beach bungalows, has a
relaxed feel —what Cheeca executives refer to as "barefoot elegance." And they mean
it. Even though a weekend stay here during peak season can easily run $1,000 or more
for nonowners, that is —the dress code consists of little more than sandals and shorts
(or a one-piece and sarong). And the otherwise formal dining room does not require
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jackets for men.
The renovated rooms have been done up with mahogany furniture in the bedrooms,
Italian marble in the bathrooms and a 42-inch plasma television for every guest's viewing
pleasure. The spa— added in 2001 —has an adult-only pool, with cabanas that rent by
the day. The 1,200-foot beach is lined with hammocks, perfect for a midday siesta.
Best of all is a pier that extends 525 feet into the Atlantic — so far out that you'll feel
you're already on one of the resort's rental miniboats.
CHEECA'S makeover and its conversion to a condo-hotel property are inextricably tied
to each other. In a post-9/11 environment, hotel and resort developers have found it
extremely difficult to secure loans for new construction or renovations. So, they've
sought another way: selling off their properties room by room to individuals. While it
means forsaking a share of the revenue, it also reduces the burden of debt.
Jerry Johnson, the managing partner of the group that owns Cheeca, said that the bill for
renovations would hit "at least" $40 million. "It wouldn't be economically feasible to do
that" running Cheeca as a "straight hotel," he said.
Buyers, of course, get a portion of the income from their rooms — rates run from $295
to $795 a night, depending upon the season. There are downsides, too. For starters,
condo-hotel living means hotel living, so items like extra closets and washers and dryers
are out of the question. Units cannot be customized or decorated to an owner's taste. And
there is no predicting the long-term income potential. "This is not for the faint of heart,"
said Bill Dougherty, sales director for the Cheeca condo operation.
Still, he has already sold more than 60 of the 92 available units, with little more
marketing effort than a few mailings to former guests at Cheeca. Mr. Dougherty suspects
a number of buyers just like owning a piece of a classic resort like Cheeca—in the same
way they might have liked owning a piece of a winery or a prize-winning thoroughbred
in years past. "It's an ego thing," he said.
Or, in the case, of Mike Miller, an entrepreneur based in Ohio, it's simply an attractive
business proposition. Having already bought condo-hotel units elsewhere in Florida, he
decided to add to his portfolio and buy one at Cheeca sight unseen with a business
partner.
Then, Mr. Miller finally got around to seeing the resort in November when he came on a
vacation with his wife. After a few days walking up and down the beach and lounging in
those oceanside hammocks, there seemed only one thing left for the couple to do. "We
liked it so much," he said, "we bought another unit for ourselves."
Guest Comforts
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THE Cheeca Lodge is among several well-known resorts and hotels nationwide that are
adding an ownership component. Here are a few others:
RITZ-CARLTON NEW YORK, CENTRAL PARK Central Park South; (212) 308-
9100.
Formerly the home of the 700-room St. Moritz Hotel, this 33-story property, dating from
1929, has long been one of the anchors of Central Park South. In 2002, the hotel was
taken over by the Ritz-Carlton Hotel Company and redeveloped into a 261-room
establishment with high-end amenities galore. Ritz-Carlton also set aside 12 apartments
on the hotel's upper floors, ranging from 3,895 to 9,500 square feet and designed as full-
time residences. Just three apartments remain, priced at $10 million to $23.5 million.
THE GREENBRIER West Main Street, White Sulphur Springs, W.Va.; (888) 741-8989.
Tracing its roots to around the time of the Revolutionary War, when vacationers came to
"take the waters," the 6,500-acre Greenbrier has long been among the most storied of
American resorts, with guests who included Woodrow Wilson and Joseph Kennedy; Sam
Snead was once the golf pro. In 2000, the resort opened the Greenbrier Sporting Club, a
development of up to 500 homes, with lots priced at $400,000 to $2 million
(homeowners are also required to buy an equity membership in the club for $110,000).
Special amenities, including a members' golf course, lodge and sports complex, are part
of the package.
FONTAINEBLEAU HILTON RESORT Collins Avenue, Miami Beach; (305) 538-
2000.
South Florida's most famous oceanside resort, which was designed by Morris Lapidus,
had its 50th birthday just last month. It came of age during the Rat Pack heyday of
Miami Beach, and Frank Sinatra, Sammy Davis Jr., Liberace and Judy Garland were
among the performers who frequented the resort. In 2001, it began sales for the
Fontainebleau Tower, its first condo development— a 36-story building at the south end
of its property. Now, it has begun sales for another condo project—Fontainebleau III —
an 18-story tower with 311 residences, priced at $450,000 to $1.7 million. Those who
purchase units will have the option to put them into a rental pool or have them available
for their own use all year.
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