1616-34 Herald Loews Hotels to pay MIA Beach RESORTS
Loews RESORTS 1010114
to buy out Miami Beach
•LOEWS,FROM IC inside and outside the new Dermer said.Others,he said, didn't treat us equally." Loews
hotel, sprucing up the will make the case that"you Miami Beach could use the
$90 million grounds, the ballroom and had one of the prime pieces of bulk of the$28 million from
But city officials note that other common areas. The land on the Eastern Seaboard" Loews to pay off its debt on
the steep appreciation Beach had been struggling to and that hotels"were lining the bonds,which amounts to
occurred,in large part,thanks rent out its convention center up to do it." about$19.8 million,or it could
to the Loews venture.It was because there was no nearby Miami Beach funded the continue paying about $1.8
the first large hotel to go up in hotel capable of housing large land purchase with$25 mil- .million a year in loan pay-
Miami Beach in 30 years and business groups, lion in bonds, and 10 years ments on the bonds and spend
has been credited with help- The 790-room Loews after the bonds were issued, the $28 million on other
ing to launch a building boom Miami Beach and,soon after Loews had the option of pay- things,Walker said.
of resort properties that lured that,the 417-room Royal Palm ing market price for the city The buyout will end the
the Four Seasons,Ritz-Carl- Crowne Plaza Resort were land.After that,the$24 mil- Loews'rent payments to the
ton and other marquee chains the two subsidized hotels lion price for the property city,revenue based on profit
to the area, designed to ease the Beach's kicked in.The 10-year mark and that hit a high-water mark
"There's a huge economic conventioneer squeeze.Both arrives Dec.1,and the buyout last year of$2.3 million.
stimulus with this project.It projects drew criticism for deal would close Dec.2. er Jose eac
was an amazing deal," said funding private ventures with The Royal Palm also has a Smith,who was not=in office
Patricia Walker,Miami Beach public dollars—and Loews' buyout option,but developer when the original lease was
finance director. decision to exercise its pur- R. Donahue Peebles com- negotiated, said he saw the
$28
She estimated that the chase option is bound to plained Tuesday that he was Loews venture as a stimulus,
Loews has paid about$23 mil- revive questions about the required to pay back all of the not a revenue source.
lion in taxes and rent to the deals. $10 million the city invested "While you can wonder
city since the hotel's 1998 "You'll have people tell in the Royal Palm. [about] the specifics of the
opening. you it was worth it as a stimu- "The city did the right Loews deal itself,what was it
Miami Beach paid $21.7 lant for tourism, for other thing with the Loews deal," the city was trying to accom-
million to buy the Loews site hotels opening in the area," Peebles said of the Miami plish 10 years ago?"he asked. The Loews hotel will pay
El
and spent another$38 million Miami Beach Mayor David Beach subsidy. "They just "It was an economic deal." back$28 million on Miami
Beach's$60 million
investment,which officials
credit with having created a
resort renaissance in the city
and throughout the region. •
BY DOUGLAS HANKS III
dhanks@herald.com
The Loews hotel plans to pay
$28 million to buy out Miami
Beach's share in the partnership
that built the oceanfrbnt resort six
years ago,a venture that cost the
city nearly$60 million,city offi-
cials said Tuesday.
The hotel's 1996 lease with the
city sets a value of$24 million for
the city-owned land,based on the
appreciation schedule written into
the deal.The lease's pricing for-
mula would add$4 million to the
purchase price this year,based on
the hotel's profit.
The price becomes available to
Loews on Dec.1 and represents a
deep discount for one of the
region's choicest pieces of real
estate,at 16th Street and Collins
Avenue. Property-tax records
show the hotel valued at more than
*TURN TO LOEWS,4C
a MORE ONLINE:TO SEE LOEWS'STOCK
QUOTES,GO TO WWW.HERALD.COM/
BUSINESS AND ENTER LTR IN THE
SEARCH FIELD