For more than a year, a proposed 18-story, glass-and-concrete tower in Sarasota moved through the city’s review process as a residential development that would bring nearly 300 condo units to a modest lot downtown. That’s four times more than city codes would normally allow.
In exchange for the extra density, the developers promised 40 of those units would be below market-rate. It was a trade-off that city officials and early supporters of the project believed would add much-needed, affordable housing to the city’s urban core.
Then the marketing materials appeared.
Billing itself as “the first new luxury high-rise residences in downtown Sarasota with three-day minimum rental freedom,” Saravela promotes an onsite rental program to help owners offer their units for short-term stays — a detail that had not been disclosed to city officials during the project’s review.
For some, that came as a shock.
“Never in our wildest imagination did we think that the Saravela would be turned into some sort of hotel or Airbnb factory, which will add materially to the traffic in that part of Sarasota,” downtown resident Peter Blanton wrote to a city commissioner in early December.
Blanton is among the small group of residents who had publicly supported the project but are now raising concerns, saying they feel blindsided and want the city to intervene.
City officials say the three-day rental model promoted by Saravele would violate Sarasota’s regulations for short-term rentals, which requires minimum stays of seven days for residential properties and bars short-term rentals from qualifying for bonus density.
Although Saravela received partial approval from the city’s Development Review Committee in July, the project cannot move forward to apply for a building permit without approval from Development Services Director Lucia Panca. That approval has not been granted.
Suncoast Searchlight asked to speak to Panica or anyone else in the Sarasota Development Services Department familiar with the issue but was not granted an interview. Emails obtained by the media organization, however, show she doesn’t appear ready to sign off anytime soon.
“We have informed the applicant of this information and requested they remove or clarify their advertising,” Panica wrote to city commissioners on Jan. 14. “We are continuing to work with the applicant on this issue.”
Under the city’s review process, projects that fail to address staff or committee concerns are not formally denied but instead are returned with additional comments — a cycle that can continue indefinitely, leaving projects effectively stalled until developers revise their plans or abandon them altogether. Other projects that attempted controversial designs have found their plans in limbo responding to the city’s comments for years before finally scaling back or dropping their plans.
The controversy comes amid a deepening affordable housing crisis in Sarasota, where the demand for lower-cost units far exceeds supply. Since 2019, the number of rental units below $1,000 a month has fallen by more than half, while those renting for more than $2,000 have more than quadrupled, according to a recent report funded by the area’s largest philanthropic foundations.
Locally and nationwide, housing researchers and policymakers have also raised concerns about the growth of short-term rentals and investor-owned properties, warning that converting homes into transient lodging can further tighten housing markets and raise rents.
Could confusion have led to the standoff?
The city’s bonus density policy was seen as a way to chip away at that problem. Passed in late 2022, it allows developers to quadruple the number of units they can build in exchange for providing “attainable” housing in the urban core.
Saravela is one of the latest projects to take advantage of that policy.
Pitched by Illinois-based GSP Development, the tower is slated to rise on the corner of Tamiami Trail and 4th Street in the Rosemary District, a residential area that consists of both condo towers and older, single-family homes. With the bonus density designation, it can fit 282 units on the 1.7-acre site — without the designation, just 85 units would have been allowed.
City officials have publicly downplayed the issue, saying the city’s rules are clear and that the project will not be allowed to operate as a short-term rental building. City Commissioner Jen Ahearn-Koch said she, too, received complaints from residents but came away reassured after a conversation with Panica.
“I asked if they could do this,” Ahearn-Koch said, “and she said no.”
Suncoast Searchlight contacted GSP Development, seeking to understand why it was marketing the building in a way the city’s codes appear to forbid, but a representative for the company declined to speak on the record about the situation.
Emails obtained by Suncoast Searchlight suggest at least one potential source of confusion over the issue, which emerged months after the project received partial approval.
In an email, an attorney representing Saravela, N. Macaire King, requested that city staff confirm its zoning codes “allows for mixed-use with condominium and short-term and long-term rental use.”
The city’s response was short and to the point.
“The intended use of the property as a mixed-use with condominiums and short-term and long-term rentals (sic) units will comply with the City of Sarasota Zoning Code and Code of Ordinances as long as the tenancy exceeds seven days,” Devynn Glanz, city development review planner, wrote back on Oct. 8.
However, Glanz’ next line may have caused some confusion.
“Short-term and long-term rentals within condominiums are not subject to the City’s Vacation Rental Ordinance,” Glanz wrote.
Glanz followed up by clarifying that units rented for fewer than seven days would qualify as transient lodging — equivalent in the city’s eyes as hotel or motel use — and that such units would need to be separated from the building’s residential units.
By mid-December, word spread about Saravela’s “unique” business model allowing three-day rentals in downtown Sarasota, leading to once strong supporters of the project caught off guard and ultimately Panica’s emails to city commissioners attempting to clarify the situation.
On Thursday, the developers’ representatives met with members of the city’s Development Services Department to discuss the situation. Afterward, Jan Thornburg, city communications general manager, told Suncoast Searchlight that the developers are working on a site plan resubmittal.
“Staff have informed the applicant that 3-day short-term rentals are not permitted,” Thornburg said in an email. “Should the applicant want to provide lodging to transient guests (essentially a hotel), that would be addressed during the resubmittal process.”
The Saravela situation highlights a test of the city’s bonus density policy, which was controversial even before it was approved in 2022. Critics argue the city’s four-times bonus density grants developers too much in return for what amounts to just over 11% of a project being classified as affordable.
When a community is dominated by market-rate units, they contend, it creates new demand for workers to serve those residents and that the relatively small number of affordable units is not enough to house the workforce that demand generates.
Once supportive of Saravela, now concerned
David Lough said he wakes up every morning and checks Saravela’s website to see if the short-term rental policy it’s advertising has changed.
After staking his reputation on the 18-story tower, the president of the Downtown Sarasota Condominium Association and a board member of the Rosemary District Association said he feels burned by his involvement with the project.
Lough and two other neighborhood leaders worked directly with the developer to shape the project, negotiating concessions and advocating for city approval in exchange for design changes and additional affordable housing units.
He said he still hopes for an amicable resolution that would allow the affordable units to be built while ensuring the city’s zoning codes are respected.
Lough’s involvement was not incidental. He has closely tracked downtown development — like the number of condo units and apartments under construction — since moving to the Rosemary District in 2017. And he had watched as Saravela’s developers navigated city requirements, including a tough fight at the planning board.
The developers had requested the city give up an alley that runs between 4th and 5th streets so the lots could be combined, allowing construction of their condo tower.
Following Saravela’s defeat at the planning board, Lough first got involved, bringing along two other active downtown residents — Blanton and Patrick McNamee.
They initially met with a Saravela representative in the spring and requested the developer add more affordable housing units, wider sidewalks, deeper setbacks and additional shade trees — over and above what the city would require. If they got those concessions, they said they would pledge their support of the project when it went before the city commission.
The developer agreed, and when it was time, all three residents spoke in favor of the project. At their urging, the city commission voted to give up the alley, allowing the project to continue the design review.
At the time, Lough said, he thought the compromise was a fair exchange and would help move the needle on the city’s affordability problems, but the short-term rental business model was never discussed while the developer courted his support.
“I was excited with the idea because we ended up with a real good compromise where a developer and the community came together,” Lough said. “It was a win-win.”
When Lough began seeing the advertisements — “Where luxury sophistication and fun meets the freedom of three-day minimum rentals” — he began to worry that the project could morph into the city’s largest hotel.
The city has several large hotels in its urban core, but the largest of those — the Ritz-Carlton located near the Ringling Bridge — has 276 rooms. By Lough’s count, Saravela’s 282 units could contain as many as 500 bedrooms, which would make it the largest.
On Jan. 4, he sent a memo to Panica, the development services director, that highlighted the condo’s advertising and raised his concerns.
“This project,” he wrote, “brings us into uncharted waters.”
This story was originally published by Suncoast Searchlight, a nonprofit newsroom delivering investigative journalism to Sarasota, Manatee, and DeSoto counties. Learn more at suncoastsearchlight.org.
Derek Gilliam is an investigative/watchdog reporter for Suncoast Searchlight. Email Derek at derek@suncoastsearchlight.org
Editor's note: Suncoast Searchlight says it does not use generative AI in its stories. If you have questions about their policies or content, contact Executive Editor-In-Chief Emily Le Coz at emily@suncoastsearchlight.org.
