1675-31 New Hotels THE MIAMI HERALD
Copyright (c) 1995, The Miami Herald
DATE: Thursday, December 21, 1995 EDITION: FINAL
SECTION: LOCAL PAGE: 1B LENGTH: 101 lines
SOURCE/CREDIT LINE: TONY PUGH Herald Staff Writer
BLACK
GROUP LOSES
S. BEACH
HOTEL BID
Miami Beach city commissioners voted unanimously to find a new developer
for the proposed black-owned hotel in South Beach, ending 18 months of
roller-coaster negotiations with a group of local entrepreneurs.
Despite an impassioned plea from local attorney H.T. Smith, commissioners
refused to give the HCF Group another 90 days to secure $25 million in
financing to restore the Royal Palm Hotel at 1545 Collins Ave.
The commission's 6-0 vote mirrored a unanimous recommendation from the
city's nine-member hotel negotiating committee, which met after HCF failed to
meet a Dec. 18 deadline on its financing plans.
For HCF President Peter Calin, losing the project was a major
disappointment.
"If the city adheres to their $10 million commitment and vigorously
pursues completion of an African American-owned hotel, then my disappointment
will be short-lived, " Calin said. "If for any reason it does not happen, and I
don't care what the rationale will be, I will then view this result as a
travesty."
HCF, a partnership of four local black entrepreneurs, received the
development rights to the hotel in 1994 when other bidders backed out of
negotiations. The project, part of an effort to increase first-class hotel
space on the Beach, was specifically designated for black ownership. It was a
major objective of a 20-point accord that resolved the Smith-led black tourism
boycott in 1993. Arthur Courshon, head of the city's hotel negotiating
committee, set the tone for Wednesday's meeting when he recommended that
commissioners seek new bidders for the project or -- against his better
judgment -- give HCF another 90 days to close their deal.
"The rest of the African-American community in this country should have
an opportunity to bid on this project, " Courshon said.
Smith later said that if he had known the city would
shift the responsibility of negotiating the hotel to Courshon's committee, he
never would have ended the boycott. Smith said much of the goodwill that
existed when the hotel proposal was first hatched seems to have passed.
"Now, what we have to say about this isn't worth a bucket of spit, " said
Smith, adding that he does not represent HCF or have a financial stake in the
project. "If you're going to stab HCF, stab them in the chest, not the back."
Smith's fiery presentation brought an emotional response
from Miami Beach Mayor Seymour Gelber.
"You cannot force on this community the difficult plight that history has
created, " Gelber said in response to Smith's assertions that blacks have
traditionally been excluded from the tourism industry. "To attack us as if
this is some irresponsible group is totally unfair, and I reject every aspect
of it. . . . We will not be buffaloed."
Original plans called for HCF to develop a $37 million, 265-room,
all-suites hotel operated by Sheraton. But after months of negotiations,
Sheraton backed out of the deal in March.
HCF then teamed with Dacra Development Corp., scaled back the project and
began work to renovate the Royal Palm into a 150-room hotel. Carnival Hotels
and Resorts was also brought in to operate the facility.
But HCF's failure to meet several deadlines ultimately spelled its doom.
Instead of a "binding financial commitment" required on Dec. 18, HCF provided
city officials with a letter
from William Myers, chairman of Barnett Bank of Miami, saying that Barnett
would lead a consortium of local banks to provide $14.9 million in loans for
the project.
Myers said Barnett would take an increased share of the loan "should
there be a gap in the participation amounts committed by other lenders." But
Barnett needed another 30 to 45 days to get other area banks to participate in
the deal.
Courshon, head of the negotiating committee, said Barnett's proposal
was structured so that the bank's financial interests were safeguarded while
the city could lose its $10 million investment if the loan defaulted.
"The bank is cracking the whip and telling everyone what they can or
cannot do, " Courshon said.
Courshon said he has been contacted by representatives of prominent black
business people, entertainers and athletes interested in the project.
Calin hasn't decided whether HCF will submit another bid.
"We gave it our best shot, " he said. "We were so close to having all the
elements to complete this deal."
Here is a brief chronology of the HCF Group's unsuccessful effort to
develop a black-owned hotel in Miami Beach:
* July 1994: Miami Beach City Commission approves proposal by HCF to
build a 265-room, all-suites Sheraton Hotel at 15th Street and Collins Avenue.
City agrees to purchase the land for $10 million.
* March 1995: Sheraton backs out of agreement to pay $8 million in
exchange for operating and managing the hotel. Miami Beach commissioners grant
HCF a 90-day extension to secure a contract with another hotel chain.
* April '95: HCF negotiates with eight hotel chains, including Westin,
Wyndham, Peabody and Doubletree. Group also
considers proposal from Dacra Development for a smaller hotel project.
* June '95: HCF requests and receives an extension until July 13 to reach
written agreement for hotel project. Beacon Council provides HCF with $200,000
in venture capital to assist the hotel effort.
* July '95: HCF agrees to deal with Dacra Development and Carnival Hotels
and Resorts to restore the Royal Palm Hotel at 15th Street and Collins Avenue
into a first-class 150-room hotel.
* November '95: City Commission gives HCF 30 days to secure financing or
lose the project.
* December '95: City Commission votes 6-0 to put out a request for new
bidders on the hotel project. HCF loses its development rights to the project.
KEYWORDS: MB COMMISSION HOTEL BLACK BUSINESS HCF
TAG: 9503220197