Major expansion of Diplomat Hotel in Hollywood gets initial OK

Plans for a major expansion of the Diplomat Hotel in Hollywood advanced Tuesday as the Broward County Commission gave preliminary approval to a land-use proposal for the development site.

But the proposal is far from finalized. And exactly who would expand the Diplomat is unclear because the hotel is for sale.

Brookfield Properties, which owns the Diplomat Hotel through its Thayer Lodging Group subsidiary, is behind the expansion plan and the land-use proposal. The county commission’s action on Tuesday advanced a plan to build a second hotel building with 500 rooms across the street from the 1,000-room Diplomat at 3555 South Ocean Drive in Hollywood. The building would be part of a mixed-use development along the Intracoastal Waterway that also would add 150,000 square feet of convention and meeting space and 350 residential units.

Wilson C. Atkinson, an attorney with law firm Tripp Scott who represents Brookfield, said the second hotel building would replace commercial space between two existing parking garages on the west side of Ocean Drive, across from the Diplomat’s current location, and it would “mirror” the architectural style of the Diplomat, including “the opening at the top of that tower where air goes through it,” Atkinson said.

County commissioners passed for state review a change to the approved land use for the 19-acre Diplomat property between the ocean and the Intracoastal Waterway, from “medium-high residential” and “commerce” to “activity center.”

Brookfield spokesperson Bruce Wiles told county commissioners that the hotel is doing well. “We’re bringing in large conventions that previously hadn’t been to Broward County … We’re producing record revenues for the county and Hollywood.”

But Brookfield has been trying to sell the Diplomat, too, so by advancing the land-use proposal, the company also is offering a potential opportunity for a new owner to expand the hotel, one of South Florida’s largest.

Two real estate firms – Newmark Frank Knight and Hodges Ward Elliott – have been hired to find a buyer for the Diplomat, which has been listed for sale since January. Bloomberg reported at the time that the oceanfront hotel could trade for $1 billion, or $1 million per key.

Thayer Lodging acquired the Diplomat property for $460 million in 2014, and soon after, changed the Diplomat’s brand affiliation from Westin to Curio, part of Hilton system. Wiles said Brookfield has invested $85 million in the Diplomat.

After it goes to the state, the Broward County Planning Council and the commission would have the final say.

The planning council in January said it was concerned about “its negative impact to emergency shelter capacities” for people on Hollywood’s barrier island under a hurricane threat. Some commissioners also expressed concern Tuesday about the impact of an expanded Diplomat Hotel on nearby emergency shelter capacity, and they suggested that failure to resolve the issue could block final approval of the land-use proposal if it advances to a second review by the county commission.