1675-30 New Hotels 1 of 13, 2 Terms
mh95 FINANCES 12/19/1995
THE MIAMI HERALD
Copyright (c) 1995, The Miami Herald
DATE: Tuesday, December 19, 1995 EDITION: FINAL
SECTION: LOCAL PAGE: 1B LENGTH: 67 lines
SOURCE/CREDIT LINE: TONY PUGH Herald Staff Writer
FINANCES
THREATEN
HOTEL PLAN
ON BEACH
BARNETT LETTER BACKS
BLACK OWNERS' GROUP
Despite Barnett Bank's apparent willingness to help finance a black-owned
hotel on Miami Beach, the head of the city's hotel negotiating committee said
he will recommend on Wednesday that the city seek new African-American
developers for the project.
The HCF Group, which was awarded development rights for the hotel in
1994, had until Dec. 18 to secure a "binding commitment" to finance the $25
million renovation of the Royal Palm Hotel at 1545 Collins Ave. On Monday, the
group presented a commitment letter from William Myers, Barnett Bank chairman
and chief executive officer, stating Barnett's plans to help a consortium of
local banks provide a $14.9 million loan for the project.
Myers indicated in the letter that Barnett would take an increased share
of the loan "should there be a gap in the participation amounts committed by
other lenders."
But Barnett needs another 30 to 45 days to secure participation
agreements from area banks. And that's time that HCF doesn't have, said Arthur
Courshon, the head of the city's negotiating committee.
"This has probably gone on six months longer than it should have . . . If
they keep extending it this way, it means they're going to extend it forever, "
Courshon said.
A partnership of four local black businessmen, HCF received the
development rights to the hotel in summer of 1994. The project was
specifically designated for African-American ownership and was the major goal
of an accord that resolved the black tourism boycott in 1993. The city has
committed $10 million in inducements to complete the hotel.
Original plans called for a 285-room, all-suites hotel operated by
Sheraton. But after months of negotiations, Sheraton backed out of the deal in
March. Since then, HCF has teamed up with Dacra Development Corp. to plan the
hotel's renovation and restoration. They have been placed on a city-imposed
schedule of deadlines to expedite the project.
But Courshon said the Barnett letter was not enough for him to recommend
that HCF keep the project rights.
"Up to this point I've seen nothing from any bank or from any individual
that leads me to believe that (HCF) has the
financial backing that will protect the interest of Miami Beach taxpayers, "
Courshon said.
Peter Calin, HCF president, said the group is closer to securing the deal
than ever before.
"This is a binding commitment," Calin said of Myers' letter. "I think
reasonable business people will look at this and say the bank is willing to
finance the project."
Craig Robins, president of Dacra, agreed.
"This isn't from a loan officer, " Robins said. " (Myers) is the chairman
of Barnett Bank of South Florida. So I think to take that as anything less
than extremely serious would be to misjudge it"
In addition, Calin said another investor, Nick Pritzker, whose family
owns the Hyatt Hotel chain, has also agreed to put $3 million into the deal,
making him a 24 percent partner in the project along with Dacra. HCF retains
52 percent ownership. Robins said Pritzker's participation is "absolute."
Myers could not be reached for comment Monday. Courshon was also not
available to comment on Pritzker's participation. •
The Miami Beach Commission is expected to decide at Wednesday's meeting
whether to grant HCF more time to complete the deal or to accept new bids from
African-American developers.
TAG: 9503210930
of 13, 2 Terms
mh95 BEACH: BLACK HOTEL PLAN 07/18/1995
THE MIAMI HERALD
Copyright (c) 1995, The Miami Herald
DATE: Tuesday, July 18, 1995 EDITION: FINAL
SECTION: LOCAL PAGE: 1B LENGTH: 52 lines
SOURCE/CREDIT LINE: TONY PUGH Herald Staff Writer
BEACH: BLACK HOTEL PLAN
NEEDS TO BE SHORED UP
Only days after the HCF Group signed a letter of agreement to build a
black-owned hotel in Miami Beach, city officials now say the document is
unacceptable.
The city has given the group of black investors until July 25 to rectify
the problems. On July 26, Arthur Courshon, chairman of the city's hotel
negotiating committee, will recommend either to approve a revised agreement or
open up the project to new African-American bidders.
"Enough is enough, " Courshon said. "It's time to fish,
cut bait or go to shore."
Last Thursday, HCF, Dacra Development and Carnival Hotels & Resorts
agreed to become partners in the $18 million to $20 million renovation of the
Royal Palm Hotel, at 1545 Collins Ave. The project would restore the
56-year-old building to a 100- to 150-room, first-class hotel.
The agreement narrowly beat a midnight deadline for HCF to line up
commitments for the hotel.
But in a recent letter to HCF President Peter Calin, Miami Beach City
Manager Jose Garcia-Pedrosa said the agreement did not contain a required
binding commitment by either of the parties to provide the $8 million to 10
million needed to complete the project. The agreement also leaves unclear what
Carnival's other financial responsibilities will be as the hotel operator.
"Your letter is not binding on anyone," Garcia-Pedrosa wrote. ". . .
(Carnival) has not indicated its ability to fulfill all financial obligations
of the project, but instead has indicated that it will not have any
responsibility to contribute or be liable for any equity or financing."
Neither Calin nor a spokesperson from Carnival could be reached Monday,
but Dacra president Craig Robins is confident the problems will be resolved.
"Mr. Garcia-Pedrosa is an intelligent man and I think his letter reflects
nothing more than a desire to reasonably nail down some concrete facts which I
don't think we'll have any problem doing by the deadline."
The city has agreed to provide more than $10 million in inducements to
complete the hotel, which is specifically designated for African-American
ownership. The project is the most ambitious of the 20 goals that resolved
Miami's black tourism boycott in 1993.
It has also proven one of the most troublesome. Original
plans called for a 285-room, all-suites hotel operated by Sheraton. But after
months of negotiations, Sheraton backed out of the deal in March, leaving HCF
with no chain to anchor the site.
Tired of delays, the city commission gave HCF until July 13 to ink a deal
for the project. Negotiations with Westin, Marriott, Doubletree and other
hotel chains never materialized.
Courshon said if HCF loses development rights, other bidders are ready
and waiting to make a pitch for the project.
TAG: 9502150565
5 of 13, 2 Terms