1674-16 Gerry Sanchez 4 MIAMI TODAY TODAY'S PROFILE WEEK OF THURSDAY,JUNE 26,1986 •
Gerry Sanchez: `Money is going to flow to Miami Beach'
Would a bank lend moneyto finance the — Prices are driving them out. There were
Jiraw^.17 3 1 #x' .t ---`csr: ,
purchase of several hotels on Miami Beach 4 • t •—v t hotels here that at one time were cheaper
by a man who has sold the Brooklyn Bridge? 1 �'-' :, than in any slum.That's changed.It will be a
Several local banks would,and have. qT ro F • al �^rr happeningluu to ht Newe in cean Drive. I York and in ontsaw
pthis .
other
The buyer is developer Gerry Sanchez, r ALDORF•lowERS �"°'6't,cu.�- )
who is so convinced that Ocean Drive insign--Vow, • cities in the nation. And this area, Ocean
Miami Beach's Art Deco district is destined • v tr/.) I($� Drive,is a better candidate
to become a major entertainment area that ,!
he is amassing hotel property along the yr - T 1 E o •j '"`! Q:So you're bullish on Ocean Drive?
beachside street. y it 3 � A:lust putting investors on notice.If they
Mr. Sanchez, 44, born in Cuba, is w:'Jteetf,:�.h { I G` • _ don't buy in Ocean Drive now from the
president here of Polortia,a company with 1 " 1 } t• �"` r r T - present owners,they are going to have to buy
offices around the nation that specialines in 1 l{ _ "Nt from me down the road.I don't want them
al. 1 �� f to say at a future date,"l was never told,I
restoring historic buildings ,and other va+a �^^''
r'�' i didn't know about it."Ocean Drive is on its
structures, When his firm was working on j{{ i _KRylta Nr •
the famous Brooklyn bridge, repairing the e � ' NF I Ff - l way,it's in its renaissance,it's on its way up.
stonework,they sold little souvenir pieces of !y'
it to raise money for the local historical -. •r, Q: You said the Brookyln Bridge was nor
of your restoration projects.What did that
society. QSIF+ f y teff involve?
Mr. Sanchez also has refurbished, or is • a tj 1 _x' A: The exterior of the bases, lee vaults '
arranging to work at such other landmarks � / /� " and the creation of a museum for the een-
as the US Capitol, the Taj Mahal and Sr. • • - /�kl tennial of the Brooklyn Bridge—piercing
Peter's Square,he said in a recent interview <, I i, l/ through the vaults, creating different at-
mospheres,Hayes, Miami • restoring the masonry.We sold
managing editor. A a small pieces of some of the stone we cut for
And he would like to buy the historic t if ' z {.G
Freedom Tower•in downtown Miami. a x'2' v _ e - SI00 a piece. So we actually sold the
Meanwhile, he said he is expecting high f''''...'.,..15‘1-'.‘i"" 'err _ Brooklyn Bridge! We had buyers from all
occupancy rates at tit WaldorfTowers over the world.All the proceeds went to the
P Y I eaoto ay Maxine ureen historical Society.
Hotel, 860 Ocean Drive, Muni Beach, Gerry Sanchez _
which he recently restored to its original Art Q: Any other restorations of famous
Deco splendor. Q: What other properties have you an obligation to l finance the arca under the structures?
acquired? Community Reinvestment Act. And this A: We're negotiating now for the
Q: Apart from Miami,where Is Polonia A: The Clevelander Hotel, the Break- auditor wants to review each application that restoration of the Taj Mahal in India,where
located? water Hotel, the Edison Hotel, the is denied.So whether on their own or under
A: San Francisco,New Jersey,New YorktBetsy the program will i alsooe training now
local
and Miami. We specialize in restoring Ross Hotel,eWhite
Grace Hotel, the Cameo potential pressure,yoneyu've
is verse to fblow toe. the tcc And we of t. negotiatingter' qua eo t foe
historic buildings.The company was formed Hotel,the\Vhite Hart and I'm negotiating Miami Beach like you've never seen before. the restoration of St. Peter's Square in the
in 1976 in New York and extended to Miami for others. I've been approached by many banks willing Vatican.
Which of these haveyou closed on so to finance any ptoierty in Ocean Drive. Q: How did you start in restoration of
two years ago. r Q: y '
tar? Q: Because of that Act or because of the historical structures?
Q:What structures has your company A: The Waldorf, Clevelander, Break- value itself? A:This is the counts y of specialists.You
restored? a water,Cameo and the Grace. A: The value itself. Even banks outside must specialize to the highest degree
A:The US Capitol,the Brooklyn Bridge, Mianti Beach have come forward and told possible. It's just reputation. Once you
the New York Stock Exchange, the New Q: You have said that you want to see a
use,"Choose the project and we will finance become a specialist,the market.narrows its
York Public Library, Trinity Church, US critical mass on Ocean Drive,What do you il."Capital Bxnk has taken a very positive leans of your competition.Then pots don't
embassies in Europe, the US Guantanamo mean by that? approach to Ocean Uh five and they're only need the client,the client needs you—
Bay Base in Cuba,all major hotels in New A: A study was made by an independent financing me. or wants you. You the c turn a historical
York of historical nature and so on and so firm, experts in hotel marketing, and it
on. concluded that you needed a minimum of Q: Initially you were financed by Tropical building over to any contractor. Also, in
800 hotel rooms upgraded (in the Ocean Federal Savings and Loan. Are they still order to qualify for the investment tax credit
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Q: What did the restoration consist of? Drive section)—so that's the critical mass. backing you? from the federal,government. you must
A: Mainly exterior,but all kinds. Q: How many hotel rooms will you hart? A: Yes,but Capital is a bigger bank and is standardsrestore . Noteverybodyis amiliarto ederal '
weh
Q: How did you get Into That business? A: Close to that figure. But tlen you'll taking a lending position. those standards,and if you don't follow the
A: l was a developer and general con- have other operators, so we will pass the Q: So you think there Is now a mere standards,you jeopardize t he invesuncnl.
tractor.I had a subcontractor who did that critical mass positive attitude about this area?
work-for nee and he couldn't provide the A: There is a change in altitude.Prior to Q: You were born in Havana, Cuba.
service,so I decided to go into that business. Q: And what will happen at that point? When did you come to the Unites!States? •
the opening of the Waldorf,Capital Bank
A: We make a lot of money. made contniuncnts to me.As a maucr of A: 1111961.
Q: It was more quantity than he could
handle or the quality was locking? 0: Meanwhile, do you foresee casino fact,they offered me the money in two days Q: Had you been working in Cuba?
_A: Quality. - gambling on Miami Beach—does It matter —and it took me three weeks to accept it.I A: Yes,for two years in a bank.When I
Q:What experience did you have? for your projections? didn't know they were going to respond so qme co New York I worked for five years
A: I had none. A: No,it doesn't. fast.They had to call me many dunes to say, with S.Henry Schroder Bank.After that I
Q: In fad, none of your hauls would "Cone and pick up the money!" formed my own accounting practice and
Q: So how did you go about ii? N'hv did if lake vuu Ihret works to financial consulting firm while continuing
A: I hired the right people. - qualify to have•casino because .would Q: my masters'degree in law.Then I became a
not have at least 500 rooms,right? respond?\Vere the lermsnot that good?
Q: How did pots manage to get contracts A: Unless you have a unity of title.But A: No, they just took me by surprise. developer — I started buying property in
to restore those buildings? you get the advantage of the tax credit for They have such a belief in Ocean Drive. New York City and developing it.At that
A: I had a developer's reputation. restoration of historical proper so the time everything was depressed in New York.
P p 1 V Q: Who are your partners in your ren- The same dung as hero-So I'm seeing here
Q: clow did that reputation come about? incentive is there. tures here? Chapter 2 in my life as developer.
A: 1 started doing landmark buildings in Q: Why have others not taken advantage A: Relatives and friends, professional Everything I sec here happened in New
New York and one led to another. of this,since property prices here have been friends,such as my accountant.You don't York.My mistake was not to invest more in
Q: What made you decide to cone to below value? need that much stoney. New York.I'm not making he same mistake
Miami? A: But they arc going up every month. Q: Not If the banks are throwing it at twice. For every dollar I invested in New
A: I came to semi-retire and relax—and Why?Because they have not been aware of you!But you do need confidence? York City, the return is multiplied 1,000
open Polonia South to do limited work.But the opportunities.Very soon there won't be A:There's no way to lose. You get all titres—and that's what's going to happen
then I saw the opportunities here. I par- any property left to buy. There arc other your money in tax credits the first year to hcrc on Ocean Drive.
ticipated in a developers'cots fee ence wilt the groups buying every week.There's only 52 begin with.You could technically buy a piece 0: How did you spot that as something to
Miami Beach Development Corporation and t?roterlies here—and some of them have no of property on December 11 and get enough 'snake money Isom?
they convinced nee of the development significance,so rheic are not that many left. tax credits for that year equal to or greater A: I went to school to Europe,too—at
opportunities in Miami Beach. Q: Are you contenylating selling vq of than the amount you invested.So how can Warsaw University,so that's why the nave
Q: Your first development here was the your properties? you lose? is Polonia,which is Poland in Spanish.!low
Waldorf Hotelµ'hes did you acquire that? A: Only to developers or hoteliers who Q: It sounds just too simple,like a money did I spot it?Because of the acquisition cost.
A: I acquired it in October and 1 restored will join me in the renaissance of Ocean machine? %Viten acquisition costs are low,especially in
to its original 1938 design.It is a hotel with Drive.I would not sell to a speculator. A: It is a stoney machine. I said I was the hotel industry,you have a good start.
46 rooms and suites in the Art Deco district Q: In a sense,you're a speculator. going to make S10 million in five years home Now in New York is the time to sell. In
and certified as so. A: Yes, but (I consider a speculator) on Ocean Drive. and I was wrong. I am Ocean Drive,it's the time to buy.
Q:What's the occupancy rate you need to sonseone who won't add value to the place.I Out/ to make it in two years.I have offers Q`When did you close on the Break •
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break even? don't care if you speculate as long as you add for the developed properties that I now own water?
A:It's 45 per cent.Right now we're 35— value—not just buy and sit on it. at tremendous profits.I have a group willing A: Monday. And we're already working
evert in this terrible period. to buy each and every property that I'm there.I fast-track all my jots.
Q: Have you had any offers? willing to sell them, providing that it is .
Q: 1)o you have rental units? A: Yes• restored.Now that interest rates are down, Q: What's next?
A: No,hotel rooms—and the restaurant Q: Offers you have rejected because of people have to invest money.Eight per cent A: The Edison,beginning in July.
and bar. that? interest in CDs is peanuts. And I may sell Q: You are also doing an exterior
A: Or because as long as I can carry it,I one to prove the point. restoration for the Florida National Bank in
Q: If ow is the occupancy? don't want to sell. Also I have received Q: Are you looking at any other areas? Miracle Mile al the corner of 1'once de
A: The hotel is about 35 per cent occupied offers from people for properties that I have A: I'm developing certain properties in Leon?
and it's going to be 100 per cent by July 4. not developed.And since they did not prove Opa-locks.A hotel and a train station. A: Yes. And I'm after the Freedom
Q: Because of a special offer for that- to me they were going to develop them, IQ; Whet will you do with them? Tower.
weekend? refused. A: They'll both become a restaurant and Q: As a contractor?
A: And the attraction of the hotel, the office buildingTheyarc buildings with A: No,as a developer—to purchase it
amenities. l'he suites have toilets worth 0: Why do you hold that view? Islamic design—unique architecture. from Mr.(Ron)Fine. •
S3,SO0 each. A: Because Ocean Drive needs
development. Q: Are they of historical Interest? Q: What would you do with it?
Q: What was involved in the refer- Q:There are some developers who have A: Yes. But my main drive is Ocean A: Restore it,as an office building,the
bishing7 not been succensful here. Drive, Miami Beach. Ins going to snake most prestigious office building in down-
A: Replacement of all the mechanicals, A: They might not be a success in Ocean Drive the safes)place to be. town Miami.
furniture,carpets and the exterior.It is now financial terms,but they have had a success Q: flow? Q: You are now seeking financing?
the safest hotel in Miami Beach.It's up to in terms of the place is full!And they deserve A: I'm going to have a patrol car 24 hours A: I am waiting for General Federal and
1990 standard—I'm quoting the chief of the a lot of credit for being the pioneers.I take a day, in combination with the city. I'M Florida National Bank to give mean answer.
Fire Department. my hat off to them for that initiative. preparing a proposal to that effect.I don't Q: What kind of price are we talking
Y any
Q:.In what way the safest? Q: Have you haddifficulties in want anybody to ever say again that this is about?
not a safe place.Ocean Drive will be zero A: Acquisition, S7 million. And
A: In terms of fire haveeto be ba.That's the financing your purchases? — crime territory.It will be full of restaurants,
a everyhotel will to be h 1990.Not A: No.All the banks now are willing to Y• restoration anodes 57 million.
wayY bars,entertainment,up and down.ft will be
even the Fontainebleau is like this. cone to Ocean Drive.At the beginning they the fun place to go. This is the American Q: Who would your partuers in that
were kind of hesitant but the Miami Beach Riviera. venture be?
Q: What's an example of the safety Development Corporation,again.organized A: I'm looking for partners. Maybe the
features? a lenders' conference andthey all in- Q: But won't it take more than a patrol potential tenants.
A: All the smoke will disappear in less dividually made commitments.In addition, car to turn it around,to attract the public?
than 20 seconds.All you need to survive is 20 the Federal Reserve Board sent an auditor to A: The public itself, the activity itself, Polonia,10735 NW Seventh Ave.,Miami-
seconds. indicate that the banks in Miami Beach have will not allow the undesirables to be around. FL 33168,(305)751-3073.