Local developers seek to restore the Marion Hotel

March 4 photo of the Marion Sovereign Building [Bruce Ackerman, Ocala Gazette]

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Posted March 4, 2022 | By Jennifer Hunt Murty

Local philanthropists and real estate developers, David and Lisa Midgett have announced their intentions to restore the tallest building downtown, located at 108 N. Magnolia Avenue, back to a hotel.

Lisa recounted how the idea came about. “Last year we came back from visiting our hotel in Porto, and we were driving by the Marion Sovereign when I asked David what it would take to restore this wonderful old building.”

David felt the answer was simple, “The building just needs a single owner with a vision.”

“When we travel, I always love to stay in the heart of a community at a small place with historic significance,” said Lisa, who is also the owner of NOMA Gallery, a fine art gallery also located up the road on North Magnolia Avenue.

“The reason I love boutique hotels is they are always quirky, one-off, unique brands that provide great experiences. They help you fall in love with a place in a way a large impersonal hotel just can’t,” said Lisa.

Lisa thinks the restored Marion Hotel could be that for Ocala, “Picture a fully-renovated boutique hotel, complete with paintings and sculptures from local artists. Imagine the best fine dining in Marion County in the current ballroom, with a coffee shop that turns into a high-end cocktail bar at night. Think about sunsets on the rooftop deck, a high-end boutique, restored walnut and brass elevators, and a cozy second-floor club lounge overlooking North Magnolia.”

While David’s idea to bring the building under a single owner sounded simple at the start, it turns out it wasn’t exactly easy. “Last year, the Association consisted of 17 different units owned by a bunch of different people. The only realistic way to restore this building was to buy all the units one by one. Every other attempt in the past two decades has failed because the owners could not agree on raising the money,” said David.

Starting in December 2021, the Midgett’s development company, Marion Opportunity Zone Fund, LLC, began purchasing individual office units and now holds the majority voting rights. However, three remaining owners, Michael Trahan, Trinity Insurance; Danesh Sookal of R&S Worldwide Investments; and attorney William McLean- have not agreed to sell.

“We have made generous offers, we offer leasebacks to provide more time, and we can communicate our vision for how wonderful this building will look restored as the Marion Hotel-but there is nothing you can do to make people sell,” said David.

However, David is confident they will acquire all the units. “We’ve been through this before as developers. You just have to be patient. Once you own a majority stake, control the Board, and pass assessments, eventually everyone comes to terms with the financial reality and the project moves forward,” he said.

“At the very least, by controlling the Association, we know we can tackle the exterior repairs this year. We have received bids from contractors. We will pass assessments and get this work done. Hopefully the remaining owners will pay their fair share of repairs without forcing us to file liens for the work,” explained David.

The Midgetts are not newcomers to restoring historic buildings. They have restored other Ocala landmarks such as the Coca Cola Bottling Plant, located at 939 N. Magnolia Ave, the Smith House located 507 NE 8th Ave, an 1888 Victorian, located on 507 E Ft. King St, and the Barnett Bank building located at 35 SE 1st Ave.  The couple has also invested time and money restoring historic hotels and resorts in Europe, the Caribbean and South America.

When asked about the costs of the project, David said, “Like everything else on this project, it depends on whether we get full control. At a minimum, fixing the exterior will likely cost about $1 million. If we are lucky enough to build a hotel, it will cost a lot more than it did back in 1927. They originally built this as a 100 room hotel for $500,000. We would be looking at 48 rooms, and the total cost would be around $12 million.”

According to history provided by the City of Ocala, citizens of Ocala came together to finance the construction of the Marion Hotel in 1927.

The costs of the initial construction were covered by the sale of stock certificates sold by the Community Hotel Corporation, using the slogan “What Ocala Builds, Builds Ocala”, with all the capital raised in just six weeks. The seven-story Mediterranean Revival hotel was built to accommodate Ocala’s growing tourism and business travelers and remains one of Ocala’s tallest buildings.

Like many historic downtown buildings, the Marion Hotel suffered in the 1970’s and 1980’s. The building was added to the US National Register of Historic Places in 1980, and in 1985, the Florida Trust for Historic Preservation granted a facade easement to protect the building and ensure it would be preserved and maintained for future generations.

In the 1990s, the building was converted to office condominiums as the Ocala National Bank building and renamed the Marion Sovereign Building in 2007.

Pete Lee, Assistant City Manager for the City of Ocala told the Gazette that he, along with city staff, Gus Gianiakis and Tye Chighizola had been working for years to try to get historic preservation grants to no avail. And working with so many different owners, made it hard to come to any sort of consensus on those repairs.

Lee agreed with David Midgett’s assessment that it would cost at least a million dollars to do necessary repairs to the building. “We know that the building needs extensive work, but we’re really excited about the possibility of that building being restored to, if not its original condition, a condition that really makes us proud in the city. A beacon for downtown.”

Lee said that city personnel from fire and building departments have recently visited the property with the Midgetts to give feedback on what it would entail to restore the downtown North Magnolia historic structure.

The Midgetts know that large projects like this one will require patience and are estimating it will take a year to come up with the architectural design and engineering plans relevant to the interior. Meanwhile, former unit owners have the ability to lease back their units through the end of 2022 while work on the exterior is being performed.

“We intend to get started on the outside of the building very soon, regardless of whether we own all the units. Everyone knows this building is a catalyst for the City’s midtown redevelopment plan. It is an eyesore, especially compared to recent renovations by neighbors like MainStreet Bank and HDG,” said David.

Because the property is listed on the National Register and the exterior is subject to a facade easement, all of the exterior rehabilitation work must be done in accordance with standards and guidelines set out by the Secretary of the Department of the Interior. “We can’t make any changes to the exterior character of the building. We have to preserve the distinctive features and craftsmanship of the property.  We lean towards repairing, not replacing. This unfortunately drives up the cost, but results in the enhancement of a historic property,” said Lisa.

The couple plan to restore the building’s name to Marion Hotel, but they have not yet decided whether the new hotel will be branded as a “flag”, or franchised hotel. “Flags certainly bring awareness, reservations and proven systems, and there are some fantastic boutique franchises available, but we want to put our own touch on things and we have a really specific vision in mind,” Lisa explained.

The Midgetts say they will not be operating the hotel or the bar and fine dining restaurant they envision on the ground floor.

“I love to stay in hotels, and I love to eat in great restaurants, but I have no business running those businesses. We have already started conversations with some very smart, experienced, and successful operators, for both the hotel management side and the food and beverage operations, so we can just focus on development, design and construction,” said David.

City of Ocala Councilman President Ire Bethea says they look forward to hearing more details about the Midgetts plans for the building.

Ocala’s City Manager, Sandra Wilson called the Midgett’s plans for the building “exciting” with the potential to “ignite” that are of downtown. “This is the opportunity the city has been looking for,” she said.

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