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By ADRIAN SAINZ
AP Business Writer
KEY WEST, Fla. --
The sights and sounds at Schooner Wharf drip with Key West attitude: Sunburned tourists
lounge near a marina, savoring drinks alongside locals wearing tank tops and sandals. A singer
warbles, "I'd rather be here, drinking a beer, than freezing my a- off up north."
Different sounds emerge from behind the bar known as "The last little piece of Old Key West"
- the sound of bulldozers working on a 32-unit luxury gated community. Pre-construction prices
for spacious three-bedroom suites start at $1.87 million.
The Harbor House development will attract an upscale clientele seeking an island lifestyle. But
its exclusivity clearly upsets some people here. Just read the writing scrawled on a retaining
wall: "Stop the Madness." "Money Talks." "Eat the Rich."
The Florida Keys are at a crossroads, beset by shortages of high-paying jobs and affordable
housing, rising property taxes and insurance, and environmental concerns. Yet the move to
"upscale" the Keys is gaining steam, a sign of growth that's commonly experienced by
tourism-dependent communities. Such growth is leaving many Keys residents feeling priced out or
ignored.
"It seems like it's paradise, but at the same time it's an economic hardship for the residents,"
said U.S. Rep. Ileana Ros-Lehtinen, R-Miami, who represents Monroe County. "That leads to
this kind of twisted, complex relationship, sort of a marriage in therapy ... The Keys community
and the tourists are always in couples therapy."
Stretching south and west from Florida's peninsula, the island chain is about 125 miles long
from Key Largo to Key West, connected to the mainland by the Overseas Highway (U.S. 1).
Tourism is the economic engine, generating $1.7 billion in total sales in 2006. Visitors enjoy the
warm waters surrounding the islands, which house rich fisheries and the only living barrier coral
reef in the continental U.S.
Dotted with trailer parks, hotels, campgrounds, marinas, retail shops and homes, the Keys
attracted 2.25 million overnight visitors in 2006, according to the Monroe County Tourism
Development Council. Day visitors, including Key West cruise ship passengers, add significantly
to that total.
The Keys has a reputation for its tropical, laissez-faire lifestyle, where it once was possible
for almost anyone - retirees and fishermen, hippies and lost souls - to move here with a little
money, in search of paradise.
"This place will always be a Mecca for the square pegs," said Michael McCloud, the
sunglasses-wearing bar singer at Schooner Wharf. "This is the end of the road."
The Keys' population and popularity increased over the years, leading to more structures getting
built on limited land.
"Geography is the biggest imperative in understanding who and what we are," said developer
Pritam Singh, responsible for Key West projects such as Truman Annex. "It's both our
attraction, that we're islands, and a curse, that we're islands."
When eight hurricanes struck Florida in 2004 and 2005, Keys visitors were asked to evacuate
seven times, resulting in lost profits for hoteliers, charter fishermen and dive operators.
Hurricane Wilma flooded homes and streets, but business owners questioned whether
evacuations were necessary for weaker storms such as Tropical Storm Ernesto in 2006.
The active seasons led to higher hurricane insurance rates throughout Florida, where the
bloated real estate market catapulted home prices. Skyrocketing property taxes and higher
costs of gas, food, and rent has made life harder for those with low- and mid-incomes -
teachers, police, firefighters, restaurant and hotel employees, and other professionals and
service workers that any community requires.
The median sales price of a single-family home was $700,000 in 2006, Monroe County
statistics show. That's nearly three times the median sales price of an existing home in Florida
in 2006, which the Florida Association of Realtors reported was $248,300.
"There is not enough industry here, not enough opportunity for well-paying jobs, relative to
what it costs to live here," said Bob Kelly, who has managed a shoe store, an art gallery and a
rental property in two different stints as a Key West resident.
These factors are likely reasons for the population drop in Monroe County. According to the
U.S. Census, the population in the Keys was 74,737 in 2006, down 6 percent from 79,589 in
2000. During that period, Florida's population grew 13 percent.
Patti Julien works at a clinic in Marathon, about halfway down the Keys. She and dozens of
others board buses at a Wal-Mart parking lot in Florida City, the final stop on the mainland,
then endure a two-hour bus ride each way because they can't afford living in the Keys.
Julien gets to the Wal-Mart about midnight, taking the day's last bus from her home south of
Miami. She then waits five hours because there's no early bus to Florida City, and she's scared
she'll miss her ride.
"It's a real problem," said Julien, 59. "I'd move to the Keys but I'd be paying $2,000 a month
down there for a comparable duplex."
Teachers are a group that face a daily financial struggle, though Monroe County leads Florida in
average annual salary for teachers with a bachelor's degree at $47,687.
Schools superintendent Randy Acevedo says the district has plans to build housing for teachers
and staff. Retention is a problem, with the district replacing about 100 teachers out of 600
every year, Acevedo said. Some don't leave but use other methods to manage a stressful life
that belies their picturesque surroundings, like take a second job.
"I can go out to dinner with the family and the waiter or waitress might be a teacher,"
Acevedo said.
There are many efforts to improve the quality of life for residents, including attempts in Key
West, Marathon and other cities to add hundreds of new affordable housing units.
Marathon Mayor Chris Bull is joining forces with Ros-Lehtinen to secure funds for improving
water quality. Storm runoff, untreated sewage and pollution threaten the economically vital
reef system.
In 2000, Congress authorized $100 million in water quality improvements. An Oct. 1 letter to
President Bush signed by six Florida members of Congress requests $29 million of that money in
the 2009 budget.
"We're definitely in a critical stage of Keys development," Bull said.
The developmental stages of places like the Keys are the subject of the Tourism Area Life
Cycle. Scholar Richard Butler says the theory discusses stages of growth: exploration,
involvement, development, consolidation and stagnation. After stagnation, communities can decline
or rejuvenate.
The Keys seem headed toward consolidation, where expensive hotels and vacation rentals
replace older motels, where a Starbucks could replace a mom-and-pop coffee shop - generating
some ill feelings in the process. In a 2004 survey, 73 percent of Key West respondents said
development was a threat to the city's character and culture.
Locals "get the feel that you are losing control of your community. Locals begin to feel
ineffective ... That's a common problem," Butler said.
Bob Bernreuter closed The Deli, a favorite for 56 years, after losing business because of the
hurricanes and rising competition from other restaurants. Bernreuter estimated there are more
than 400 restaurants in Key West alone - quite a lot for a population of about 25,000.
Bernreuter said he did not want to raise prices to avoid alienating his regular customers who
enjoyed the affordable breakfast fare and fresh seafood, and no one in his family was going to
take over.
"You don't have as many families coming down here anymore who would have met the price
structure for the restaurant," he said.
Developers like Singh are leading the upscaling of the Keys. One project is Parrot Key, a
74-unit resort offering multiple bedroom units, with amenities such as kitchens, flat screen TVs
and iPod docking stations, for $400 to $500 a night. The location is where a Hampton Inn once
stood, which offered smaller rooms at one-fifth of the price, with fewer amenities.
Singh said it's critical for Key West to replace its older properties with modern, sustainable
ones. Fancier vacation rentals are necessary to provide a quality experience in a competitive
world tourism market and manageable profit margins despite high taxes, insurance and water
treatment costs, he said.
"It's pretty clear the Keys is already on its way" toward upscaling, Singh said.
Harbor House developer Keys Caribbean Resorts said it wanted to maintain the Key West-style
architecture to preserve the quaint, rustic feel of the area. A previous design drew neighbors'
ire, and the developers changed it. Harbor House will offer homes and vacation rentals.
"A lot of people that have been here for many, many years just do not like to see any change
whatsoever," said Keys Caribbean chief executive Craig Hunt. "When you look at Harbor House
it looks like Old Key West. There was some pretty ramshackle buildings on that ground. It will
look way better than it was."
Sitting in a restaurant near Schooner Wharf and Harbor House, longtime Key Wester John
Mertz laments the current trends.
Expensive vacation rentals are pricing out tightfisted travelers, such as families. Homes that
are too expensive for regular folks are bought by out-of-towners seeking a second home, but
only stay in it for a few months a year.
Locals are losing access to the water because the best waterfront properties end up in
developers' hands. Tourist congestion creates excessive traffic and noise.
"When I first moved here it was very egalitarian," Mertz said. "Now there's more of a class
distinction - the obscenely rich and their servants. It can become a horrible thing, sort of like
a monopolistic Disney World controlled by just a few that don't really live here."
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