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