1616-59 Various Miami Beach i
SLY. hotelier seeks
• •
Miami Beach
,
resort
, •ROYALPALM,FROM1C Royal Palm owner R. Donahue Peebles
convention-friendly hotel dismissed the strategy as a misguided gambit
developed by a black-owned t0 `steal'the hotel.
firm.In June,Black Enterprise
magazine named Peebles 1
Atlantic Development its
Company of the Year, and requirement that the hotel be years past its completion date
Peebles recently was elected black-owned. Stuart Kapp, a and a reported $16 million
to a second term of Miami- Boca Raton lawyer represent- over its original budget.
Dade County's tax-funded ing Achenbaum,said the lease GMAC,the lending arm of
tourism board, the Greater exempts from the minority General Motors, had signed
Miami Convention&Visitors requirements the kind of on to purchase the$40 million
Bureau. financial structure his client Union Planters loan that had
On Thursday,Peebles dis- plans for acquiring the hotel. funded the construction of
. missed Achenbaum's strategy Lawyers for Union Plant- the hotel. But in June 2000
as a misguided gambit to ers and WSA-Management GMAC backed out,citing the
"steal" the Royal Palm that Florida, Achenbaum's corn- delays.Union Planters began
could never succeed given his pany,agreed that Achenbaum a series of extensions and
options to extend the loan was on target to buy the Royal additional loans,bringing the
until next summer with Union Palm mortgage last month. balance to the current $53.8
Planters,his financial backers But WSA balked after the million, according to court
like the Inter-Continental Royal Palm's builder, Clark documents and interviews.
hotel chain, and the stability Construction, sued Union INVESTORS NEEDED
of the Royal Palm itself. Planters over $12 million in
"I've got a great asset in the alleged back fees on the pro- Commercial banks like
I most exciting destination in ject. Union Planters typically make
the world," he said. Saying interest-only loans to fund
I
LAWSUIT construction projects on a
Achenbaum is the lone suitor p 1
for the Union Planters loan, Within days WSA sued short-term basis. The devel-
Peebles added:"Only one per- Union Planters in U.S. Dis- oper usually lines up a large
son saw it as an opportunity trict Court in Miami,demand- investor,like a pension fund,
in a hot market, and that ' ing that it be allowed to buy to take over the financing
should tell you something." the loan without assuming once the project is finished.
Achenbaum—whose sec- any liability for the Clark law- After the sale, the borrower
and hotel,the 208-room Gan- suit.The bank refused to put begins paying interest and
sevoort recently opened in any conditions on the sale, principal on an extended
Manhattan's chic-but-edgy which had been scheduled to schedule,usually over at least
meatpacking district and close July 20. 10 years.
charges nearly$400 a night— A Union Planters lawyer Peebles said the Royal
said he would like to steer the said that by refusing to close Palm is valued at more than
Royal Palm away from large on the loan,WSA forfeited its $100 million,far above the$54
business groups and attract $2 million deposit and its million mortgage on the prop-
more high-spending vacation- sales contract and that the erty. Such an equity cushion
ers. bank is free to shop the loan would probably ease the pres-
i "We would market it as a elsewhere. But WSA claims sure on Union Planters to get
very upscale boutique com- the bank still must sell it the the loan off its books,which is
peting with the Delano and loan — free of the Clark usually the aim of construe-
' the Shore Club,"Achenbaum claims — and that Union tion lenders, said Maurice J.
said. Planters is barred from even Veissi, a Miami real estate j
extending the payment sched- consultant and past president f
SUBSIDIZED ule on the mortgage. of the Florida Association of
Miami Beach subsidized "We don't want our money Realtors.
the Royal Palm project in an back," said Kapp, of Pros- "If [the bank's] loan was
effort to increase the number kauer Rose in Boca Raton. made with adequate equity,
of rooms available for large "We want to buy what we then they're not panicky,"
business groups using the contracted to buy,which was Veissi said. Generally,banks
Miami 'Beach Convention a good first mortgage." will negotiate with a bor-
Center.It was unclear Thurs- Union Planters lawyer rower to extend a loan past its
day if the Royal Palm's lease Hilarie Bass declined to com- maturity date in part to avoid
on the city-owned land would ment on the bank's plans the bad publicity that comes
interfere with Achenbaum's relating to the loan. with calling a mortgage and
vision of a pricier resort '. The current dispute can be pursuing foreclosure.
there. traced back to 2000,when the "What you don't want to
It also wasn't known how Royal Palm was mired in con- do if you're a lender is go after
Achenbaum, who is white, struction problems that ended someone,"he said."It gener-
would satisfy the city's up stretching the project two ates a lot of bad will."