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1675-24 New Hotels KEYWORDS: BLACK TOURISM HOTEL INDUSTRY MB TAG: 9501160324 11 of 13, 2 Terms mh95 MIAMI BEACH BANK 01/29/1995 12 of 13, 2 Terms mh95 PARTNERS: BLACK-OWNED 01/26/1995 THE MIAMI HERALD Copyright (c) 1995, The Miami Herald DATE: Thursday, January 26, 1995 EDITION: FINAL SECTION: LOCAL PAGE: 1B LENGTH: 99 lines ILLUSTRATION: photo: Eugene Ford Jr. and Jerry D. Bailey and Peter J. Calin (a) SOURCE/CREDIT LINE: TONY PUGH Herald Staff Writer PARTNERS: BLACK-OWNED HOTEL IS MOVING AHEAD When Miami Partners For Progress was formed in 1993, many people felt the group would never achieve its major objective -- to bring a black-owned, convention-size hotel to Miami Beach. But 20 months after the proposal was announced, developers have come forward, the city has chipped in $10 million to buy the land, Sheraton Hotels wants to operate it, and a group of local banks are working to finance it. But still, the rumor mill churns. Why is it taking so long? Do the developers have enough money? Are the banks shying away? These are questions Peter Calin has heard for months. A vice president with American Express, Calin is one of four black businessmen who formed HCF Group Inc., the partnership with rights to develop the 265-room Sheraton Suites Hotel. But because of spiraling construction costs -- which have pushed the hotel's price from $37 million to $44 million -- and the project's slow progress, speculation is high that HCF won't pull it off. Calin says, "Not so." "I've heard from the beginning that we wouldn't be able to do this. The person in the street should understand the whole process takes time to work out the details, " Calin said. "It's not unusual for a complicated project like this to take this amount of time." But as negotiations intensify in the next few months, HCF will have its work cut out to hold up its end of the deal. The group planned to invest only $1 million in the project, but increasing costs have nudged that figure up to $4 million. The group is looking for additional investors to pick up the slack -- and they need not be black. "We believe there's great interest in the African-American community, and we're looking to tap those investors. But the most important thing to us is that the hotel open its doors, so we won't turn away money from non-African-American sources," Calin explained. In addition to Calin, HCF is made up of Argus Construction Co. owner Eugene Ford, Texaco tax attorney Jerry Bailey, and investor Marvin Holloway. The hotel would be at 15th Street and Collins Avenue, directly south of the 830-room Loews Hotel planned for 16th Street and Collins. Arthur Courshon, chairman of Jefferson Bank and a member of Miami Beach's hotel negotiating committee, is hopeful that HCF can find the cash. If it can't, the city would have to look for a new ownership group. "I don't think that's going to happen, " Courshon said. "From what I see so far, they're getting there. They're not there yet, but I don't have the feeling that they won't get there. . . . Reports of their death are greatly exaggerated." Calin, in fact, is optimistic about recent developments. An agreement with Sheraton to provide $8 million in exchange for managing and operating the hotel awaits only corporate board approval in February, he said. The agreement was slowed when Sheraton thought a $10 million contribution from the city of Miami Beach was a grant rather than an "inducement" that must be repaid. That $10 million will go toward purchasing the $11 million site. HCF must come up with the other $1 million. The group must then secure bank financing of about $22 million to complete the deal. Barton S. Goldberg, president of Jefferson Bank, is working to form a consortium of 12 to 20 banks that would provide up to $100 million for the Loews and Sheraton hotels. Hotel development projects have been unpopular with area lenders for more than a decade, but Goldberg said these projects have bankers very interested. "The reason they're interested is because it's a CRA- qualified project, and it will help create a lot of jobs," Goldberg said. The Community Reinvestment Act requires banks to invest in all areas they serve, including poor areas. Noncompliance can halt branch expansion and other endeavors. Since the hotel development area is designated as "blighted, " banks would get valuable CRA points for lending there. For that reason, "we've probably got more people that want to get in (the consortium) than we need, " Courshon said. A task force is meeting to determine how the consortium will operate, but Goldberg said the deal needs to be completed before the numbers can be crunched. "They can't underwrite the loans until they know exactly what the deal is going to be, " Goldberg said. Because the project was pivotal in resolving the black tourism boycott, it has attracted attention nationally. Last month, Black Enterprise magazine highlighted the project with a full-page article in its Newspoints section. And The Black Convention magazine is also planning an article. Syndicated talk show host Tony Brown advocates blacks setting up an "economic shield" or niche market by owning hotels in the nation's 20 largest cities. If the Miami Beach hotel materializes, Brown said it could have a historic impact. "Miami Beach would become to black America what Montgomery, Ala., became when Rosa Parks started the civil rights movement. . . . It would mean the beginning of economic empowerment of the black community." Courshon said he wants to complete the deals on both the Sheraton and Loews hotels by June. Calin wouldn't say which, if any, new investors HCF is courting. Only that the group is shaking the trees. "I'm certain the bumps in the road aren't over, " he said. "This is a very complex public-private deal. But we're confident we'll get to the ultimate goal of developing this hotel." CUTLINE: NURI VALLBONA / Herald Staff HOTEL INVESTORS: Eugene Ford Jr., Jerry D. Bailey and Peter J. Calin are seeking more investors for their planned hotel. KEYWORDS: DEVELOPMENT CONSTRUCTION HOTEL TAG: 9501070034