CLEARWATER — A development group wants to replace the former Palm Pavilion Inn with a nine-story, 144-room hotel next to Crabby’s Beachside Pavilion at 10 and 18 Bay Esplanade, City Council members learned during a May 18 work session.
Applicants MHG Palm Pavilion Hotel and Sixth Flag Planted are seeking a 91-unit allocation from the Hotel Density Reserve through Beach by Design. The 1.06-acre site’s underlying Resort Facilities High future land use designation allows 50 overnight accommodation units per acre, or a 1.2 floor area ratio for nonresidential uses.
The applicants “aim to offer an elevated experience that combines the historic food service at the Palm Pavilion with the amenities of a new hotel worthy of this beachfront location,” planning staff said in their report. “The restaurant will provide takeout, room service and coordinated food and beverage for the hotel operations.”
The property consists of two portions developed in 1926. The west portion contains a 7,895-square-foot restaurant, which will be preserved. The east portion contains a 30-room inn that will be demolished to make room for the new hotel.
The original Palm Pavilion was built in 1926 as a bathing pavilion and snack bar, where visitors could rent swimsuits and use lockers. The Hamilton family operated it for more than 60 years and built the Palm Pavilion Inn in 1988, showcasing its Art Deco-style rooms and efficiencies. The Hamiltons sold the inn to a hotel development group late last year and sold the neighboring Palm Pavilion Beachside Grill & Bar to Beachside Hospitality Group.
Beachside Hospitality Group reopened the restaurant in early 2026 as Crabby’s Beachside Pavilion, upgrading the facility, retaining the existing staff and keeping much of the original menu while adding signature Crabby’s items such as wild bairdi crab and royal red shrimp. Daily live music overlooking the gulf continues.
According to the site plan, the first four floors of the hotel will house a parking garage and back-of-house components, including maintenance rooms and trash and laundry facilities. The fifth floor will contain an amenity area, and the sixth through ninth floors will be devoted entirely to guest rooms. The 144-room hotel requires a minimum of 173 off-street parking spaces; the garage will provide 173.
The 75-foot building features “a tropical modern architecture, which is consistent with and complements the tropical vernacular envisioned in Beach by Design,” planners said. Beach by Design guidelines permit heights up to 100 feet, measured from the design flood elevation.
The site will be accessed via a two-way driveway from Bay Esplanade and Kendall Street on the south and north sides of the property, leading to the parking garage. The primary pedestrian entrance will be on the south side, with a secondary entrance on the north. The ground floor will also contain an elevator to the lobby and pedestrian access to the restaurant on the west side of the property.
A formal landscape plan is not required at this stage, but conceptual areas shown on the site plan provide adequate space for foundation landscaping along all street frontages, planners said. No perimeter landscape buffers are required in the Tourist District. Flexibility may be requested as part of a Comprehensive Landscape Program reviewed at formal site plan approval.
The submitted traffic impact study concluded that traffic operations at nearby intersections and on adjacent roadways would continue at acceptable levels of service. The project “appears to be generally consistent” with Beach by Design criteria for allocating hotel rooms from the reserve, staff told the council, including compliance with the Metropolitan Planning Organization’s countywide approach to traffic concurrency management.
If approved, the development agreement would remain in effect for up to 10 years. It requires the developer to obtain site plan approval within one year, begin vertical construction within four years of that approval and obtain a certificate of occupancy within six years of site plan approval.
The agreement also requires the return of any unused hotel units obtained from the reserve, prohibits converting allocated units to residential use and requires recording a covenant restricting the units to overnight accommodations.
Vice Mayor Ryan Cotton asked what the project would leave in the city’s hotel reserve. Staff said the reserve is “a living, breathing document” but estimated about 19 units would remain after this allocation. Additional units can be added from expired projects.
A second public hearing is scheduled for 6 p.m. June 4.