Margaritaville Beachwalk has scrapped its plan to build restaurants by its blue lagoon and will now develop short-term stay cottages instead.

The change was announced during a tense Board of County Commissioners meeting on Tuesday, where the cottage proposal was approved by a 3-2 vote.

“We had planned to bring restaurants to surround the lagoon, but after years of trying, we couldn’t make it happen,” said Alfonso Costa Jr., COO of Falcone Group, which partnered with PEBB Enterprises on the project.

Costa said the developers spoke with over 100 restaurant owners but couldn’t finalize any deals. Fysh Bar & Grill and Whiskey Joe’s were once considered tenants, but both deals fell through.

Instead, the developers requested approval for 68 cottages with up to five bedrooms each. The units will be managed by the Margaritaville Hotel and won’t be listed on Airbnb or VRBO, officials said.

Many Beachwalk residents opposed the plan, fearing the cottages would attract loud, short-term renters.

“It was supposed to be a walkable area with shops and restaurants for us to enjoy,” resident Claire Karp said.

Others worried that cottage guests would have access to private community amenities, including the lagoon. However, Costa clarified that no agreement has been made to allow access.

Project representative Ellen Avery-Smith said the cottages can’t be rented to the same group for more than three months, and hotel management will handle security, cleaning, and trash pickup.

Developers argued that the cottages are a better option than a large commercial store moving in.

“It’s unfair to say we didn’t try to make something that fits the neighborhood,” BRL official Evan Rosenblatt said. “Instead of another Walmart, these hotel cottages match the style of the surrounding homes.”

The proposal was approved by Commissioners Henry Dean, Roy Alamo, and Christian Whitehurst, while Sara Arnold and Krista Joseph voted against it.