1675-17 Ritz-Carlton of 45, 1 Terms
mhcur BUILDER OFF 2 RITZ-CARLTON PROJECTS 04/19/2002
THE MIAMI HERALD
Copyright (c) 2002, The Miami Herald
DATE: Friday, April 19, 2002 EDITION: Final
SECTION: Business PAGE: 1C LENGTH: 72 lines
ILLUSTRATION: map: Hotel sites
SOURCE/CREDIT LINE: BY DOUGLAS HANKS III, dhanks@herald.com
BUILDER OFF 2 RITZ-CARLTON PROJECTS
The builder of the Ritz-Carlton hotels in South Beach and Coconut Grove has
left both projects, halting construction at the half-finished South Beach
resort and prompting the lender to take charge in Coconut Grove.
McCann Inc., a New York-based construction firm, notified Miami Beach
inspectors on April 12 it was off the job in South Beach and wouldn't be
coming back. The construction site, which spans practically the entire block
at Collins Avenue and Lincoln Road, has sat idle and empty since, city
officials said.
McCann's departure followed its dismissal from the Coconut Grove project in
February, people connected with the project confirmed Thursday. McCann had
been the lead developer in the Grove Ritz as well as the general contractor, a
joint venture backed by SunAmerica Inc., a California insurer and real estate
investor.
SunAmerica has installed its own construction firm for the Grove project, a
pair of condominium towers off Bayshore Drive that will devote eight floors to
a Ritz hotel.
The reason behind McCann's departures from the two projects could not be
determined Thursday. A Ritz-Carlton spokeswoman said both Ritz-Carltons had
fallen behind their construction schedules.
The signs of turmoil at the pair of independent, but intertwined,
Ritz-Carlton projects come during rocky times for the national hotel industry,
and amid concerns that too many luxury resorts are opening in the Miami area.
Ritz-Carlton spokeswoman Michelle Payer acknowledged Thursday that both
projects had experienced delays, but that the problems would be resolved.
DiLido Beach Resort, the developers of the beach Ritz, plan on finding a new
contractor soon, while SunAmerica is pushing to make the hotel's September
opening date, she said.
According to published reports, an investment group that included McCann
president Bruce Fahey had borrowed as much as $125 million for the Grove Ritz
project, mostly from SunAmerica, a California insurer and subsidiary of the
$185 billion insurance company AIG.
SunAmerica managing director Doug Tymins said Thursday night that
SunAmerica invested its money in exchange for a controlling stake in the Grove
Ritz, and now had taken control of a project it once left to McCann.
Tymins said McCann resigned the Grove job.
Executives at McCann Inc. could not be reached for comment Thursday
evening. Representatives of DiLido Beach Resort also could not be reached.
Though both projects bear the Ritz-Carlton name, they are being developed
by separate investors. While McCann served as both contractor and lead
developer at the Coconut Grove Ritz, the company was merely the hired builder
for DiLido Beach Resort, officials familiar with the two projects said
Thursday.
Miami Beach officials said Thursday it would take about 10 days to approve
a construction permit for a new contractor, but that DiLido Beach has yet to
contact them. The $100 million project will fold the 1953 Di Lido hotel into a
new Ritz-Carlton building on Collins Avenue, with 375 guest rooms and
oceanfront views.
The Ritz hotels would be among eight new top-tier resorts set to open in
the Miami area within two years of each other, just as the hotel industry has
struggled with an economic slowdown and jittery travels from the Sept. 11
terrorist attacks.
Some question Ritz-Carlton's decision to open three hotels in the Miami
market. (The Ritz in Key Biscayne debuted last summer. )
Though different developer groups are building the hotels, Ritz-Carlton
will run them. The beach Ritz was supposed to open this summer. Payer, the
hotel spokeswoman, said the company now expects the project to finish next
year.
The Grove Ritz already has people living in its first tower, which is all
condominiums. Sales director Veronica Cervera said workers still are finishing
up minor work there, and have about five months left to go on the second
tower, which will house the hotel.