Chetrit’s Tides hotel on Ocean Drive faces $45M foreclosure lawsuit

(The Tides South Beach via Facebook)

(The Tides South Beach via Facebook)

Affiliates of the Chetrit Group are facing foreclosure of their long-shuttered hotel, The Tides South Beach.

SHEDDF3 VNB LLC, tied to Safe Harbor Equity, filed a foreclosure lawsuit against CG Tides and other companies linked to the New York-based Chetrit Group over the 11-story hotel at 1220 Ocean Drive, court records show.

Joseph Chetrit, a founding partner of the family owned company, did not immediately respond to a request for comment.

The Tides has been closed since Hurricane Irma hit South Florida in 2017, according to the Miami Herald.

The pandemic has wreaked havoc on the hotel industry nationwide, with some properties opting to stay closed until tourism rebounds.

The complaint alleges that the Chetrit entities and Cuesta Construction failed to satisfy the mortgage, which was due Dec. 20. Chetrit secured a $45 million mortgage for the hotel and an assemblage of properties behind the hotel in 2014. Ocean Bank was the lender. In January, Ocean Bank sold the debt to the Safe Harbor Equity affiliate.

According to the lawsuit, filed in Miami-Dade Circuit Court on Thursday, Chetrit secured more than half a dozen extensions until it allegedly missed its final payment.

In addition to allegedly failing to pay off the loan, the borrowers failed to maintain the minimum level of insurance required under the terms of the mortgage, the lawsuit alleges.

Safe Harbor is seeking the unpaid principal of nearly $42 million, plus interest, attorneys’ fees and other costs. A spokesperson for Safe Harbor said that the borrower has “made indications that [it’s] seeking to refinance the loan” but has not yet done so.

The properties include the Art Deco hotel on Ocean Drive, plus a mixed-use building fronting Collins Avenue that Chetrit redeveloped.

Chetrit has stalled on other projects in South Florida, including a major mixed-use development it planned along the Miami River. That project, valued at $1 billion, was expected to have about 1,700 residential units, 330 hotel rooms, 266,000 square feet of retail and office space, and more than 2,000 parking spaces.

It also owns a project under construction in Collins Park in Miami Beach and the shuttered Miami Beach Resort, an oceanfront hotel at 4833 Collins Avenue.

Mango’s owner lists South Beach assemblage

The properties listed in South Beach, including Mango's South Beach location (CBRE, Mango's via Facebook)

The properties listed in South Beach, including Mango’s South Beach location (CBRE, Mango’s via Facebook)

An assemblage of South Beach properties, including the home of Mango’s Tropical Cafe on Ocean Drive, hit the market unpriced.

The properties include 900 Ocean Drive and 909, 919 and 929 Collins Avenue in the Art Deco Historic District, according to the listing. David Wigoda and Lee Ann Korst of CBRE have the listing. The assemblage spans just under 1 acre.

David Wallack, longtime operator of Mango’s, owns the 20,000-square foot building on Ocean Drive, constructed in 1952. The Wallack family has owned the building for more than 60 years. Mango’s opened about 30 years ago.

Wallack and his son, Josh, have secured an option for the three Collins Avenue properties and now seek proposals to buy and redevelop the entire assemblage.

So far developers from across the world have expressed interest, Wallack said. He believes that local business owners and local political leaders are ready for a new development in the area. But it may take time.

“Beginning is the most important thing,” Wallack told The Real Deal. “We’re looking to create new excitement internationally. We want this development to reach the next level.”

Wallack declined to give a desired price for the assemblage, saying that he is open to various ideas for the property, even if they don’t include Mango’s or result in a new concept for the cafe.

The 6,000-square-foot building at 909 Collins is owned by a company managed by Isaac L. Ursztein, according to records. The company bought the building in 2010 for $2.6 million. The building was built in 1925.

The building at 919 Collins is owned by a company managed by Kathleen Rampaul of Staten Island. The 8,000-square-foot building was built in 1924. The company bought the building for $7.1 million in 2017, records show.

The 8,000-square-foot building at 929 Collins is owned by an investment group with ties to Julio R. Marques Gonzalez, Alejandro Gonzalez, Freddy Alvarado Lopez, Isabel Vives, Enrique Barton, Maria Emilia Salvador Barton, Alejandro Isava, Rafael Isava and Ana Alejandra Isava. Barton is a licensed real estate broker with Met 21 Group, according to records and his LinkedIn profile. The group bought the building, constructed in 1934, for $2 million in 2009.

Earlier this year, Mango’s was part of a group of local restaurants to receive money through the federal Paycheck Protection Program program.

Other proposed projects nearby in Miami Beach include Michael Shvo’s plans to add a residential tower behind the landmark Raleigh Hotel.

Party’s over: Clevelander South Beach closes after employee tests positive for Covid

Clevelander South Beach

Clevelander South Beach

The Clevelander South Beach closed over the weekend after an employee tested positive for Covid-19, a month after reopening.

The closure comes as the commercial mortgage-backed securities loan backing the hotel is in special servicing.

A spokesperson for the 60-key hotel at 1020 Ocean Drive in Miami Beach confirmed that one employee tested positive “with concern there could be more.” The hotel closed on Saturday “in an abundance of caution” due to the record number of Covid-19 cases in South Florida, the spokesperson said. Miami is considered a new epicenter of the coronavirus pandemic.

“Given current conditions we simply cannot ensure the safety and wellbeing of our guests, customers and team members, which remains our top priority. We are determined to get back to doing what we do best as soon as it is safe to do so,” a statement from the hotel said.

Jesta Group, a Canadian-based investment company, owns the Clevelander. The CMBS loan, whose original amount was $32.5 million when it was provided by UBS in October 2018, is more than two months delinquent, according to data from Trepp. The loan’s balance when it was sent to special servicing was $18.4 million.

The Clevelander’s spokesperson did not immediately respond to a request for information about the loan’s status.

Like other hotel owners, Jesta requested Covid-19 relief from its lender in April, and by June, the loan was transferred to special servicing “due to imminent monetary default,” according to Trepp. Jesta is being represented by a third-party consultant in its negotiations with the special servicer.

The iconic South Beach hotel had reopened to guests June 5 with its “Cleve Cares” program, which included limiting access to public spaces and reduced restaurant capacity. Guests were also required to wear masks at all times and practice social distancing, according to a reopening release. Last week, due to a growing number of cases in South Florida, Miami-Dade County Mayor Carlos Gimenez ordered restaurants’ indoor dining rooms closed.

Many hotels have waited to reopen, despite being allowed to operate as of June 1. Restaurants are also increasingly closing voluntarily due to the surge in cases. As of Monday, there were 12,624 new cases of Covid-19 in Florida, for a total of 282,435 cases statewide.

During a virtual press conference on Monday, Gimenez said he “had no intention” of going further with restrictions but that “everything is on the table.”

Staff at the Clevelander were required to wash or sanitize their hands every 30 minutes, and all team members were screened daily, according to the release.

In 2018, Jesta acquired the Art Deco property, built in 1938, for $20.6 million. It was part of a larger $28.5 million deal that included the adjacent Essex House.

Of the South Florida CMBS hotel loans in special servicing, Fontainebleau Miami Beach’s nearly $1 billion loan is at the top of the list. Soffer’s Fontainebleau Development has remained current on its payments, but is seeking modifications to the loan documents, according to Trepp.

Jimmy Resnick sells Alton Road retail building for $9M

955 Alton Road (Credit: Google Maps)

955 Alton Road (Credit: Google Maps)

Miami Beach investor Jimmy Resnick sold a retail building on Alton Road for $9.25 million.

Hibiscus Alton Inc. sold the 16,441-square-foot building at 955 Alton Road in South Beach to 955 Alton Road MIA LLC, property records show. The building was previously home to Coco Bambu, a Brazilian seafood restaurant that closed more than a year ago.

Resnick bought the property for $420,000 in 1992, records show. Built in 1950, the building was designed by architect Norman Giller, and was once the headquarters of Miami Ad School and the long-time home of the Hibiscus Masonic Lodge.

The latest buyer is a Delaware company that lists insurance brokerage Lockton Companies’ address at the 777 Tower in Downtown Los Angeles.

The building was available for lease with Avenue Real Estate, and includes an 8,348-square-foot ground floor and an 8,093-square-foot second floor, according to the listing. A tenant could subdivide both floors. The property also includes 18 parking spaces and outdoor dining.

About a year ago, investors Jefferson Brackin and Michael Bird paid $5.35 million for the building at 740 Alton Road.

Nearby, Russell Galbut’s Crescent Heights and its partner Terra are planning to build the Park on Fifth, a 44-story luxury residential tower at 500 Alton Road.

Russell Galbut’s Crescent Heights wants a rooftop movie theater at 1212 Lincoln project

Rendering of Rooftop Cinema Club at 1212 Lincoln and Russell Galbut

Rendering of Rooftop Cinema Club at 1212 Lincoln and Russell Galbut

Russell Galbut’s Crescent Heights wants to open an outdoor rooftop movie theater at its 1212 Lincoln Road project on Alton Road in Miami Beach.

Miami Beach’s Land Use and Sustainability Committee on Wednesday moved to have the Miami Beach City Commission vote on a proposal next Wednesday that would allow rooftop movie theaters along Alton Road’s commercial corridor between 14th Street and the Collins Canal. The committee did not offer a recommendation.

The zoning rule, if approved, would allow outdoor movie venues with a capacity of 250 to operate from 5 p.m. to midnight on weekdays and 5 p.m. to 1 a.m. on weekends.

Gerry Cottle Jr., founder of the Rooftop Cinema Club, says his company is interested in making its Florida debut at 1212 Lincoln, on the 1600 block of Alton Road. The five-story mixed-use project is expected to include a citizenM hotel.

Rooftop Cinema already has three venues in London, three in California, one in New York and one in Houston. It’s premise is to show classic movies in an outdoor setting within an urban environment. Customers are given headphones and watch movies on a large screen. They are also served cocktails and food, Cottle told commissioners.

Cottle said the operation is adaptable to the social distancing required during the Covid-19 pandemic. “Thinking creatively, this is the kind of outdoor activity, with social distancing, that will be able to move forward,” he said.

However, the proposal met with opposition from residents. Eight West Avenue area activists called into the committee’s virtual meeting to oppose the item, saying they feared that the alcohol-serving venue will cause late night noise, light pollution, and could evolve into an outdoor party venue.

Commissioner Ricky Arriola endorsed the concept, adding that rejecting it could send a negative message to any businesses and developers wishing to invest in Miami Beach.

“I don’t think we want to send a signal to the business community that they will have a [tough time] if a few people object,” Arriola said. “This is something that benefits the entire city. We’re in great jeopardy of losing Regal Cinema [on Lincoln Road]. A lot of movie chains filed for bankruptcy. This might be the only place to see a movie.”

Nearby residents also complained that too many variances were already granted to Crescent Heights’ 1212 Lincoln project.

“The building has already encroached on us. We already have…. issues with lights at [1212 Lincoln’s] garage. The air conditioning faces the residential area,” said Mark Lacerda, a resident of the 1615 West Avenue condo building. “We are already suffering…. We don’t want any additional variances being added.”

Indeed, the mixed-use hotel, retail, and parking garage building is already allowed to have “entertainment venues” on the ground floor and alcohol-serving restaurants on the rooftop.

Galbut’s daughter, Marisa Galbut, said she’s more than willing to “work with city staff” to create a better ordinance, but insisted that stopping this project will harm the local business community. “The community is already hurt and will be hurt even more [if this is rejected],” Galbut said, stressing that the proposed ordinance still has to be heard by the Miami Beach Planning Board.

Commissioner Mark Samuelian said the item “still has a long way to go before being a final ordinance.” And commissioner Michael Gongora agreed. “What is [being proposed] right now will not have my vote,” he said.

Multiplan launches sales of boutique luxury condo project on Ocean Drive

Multiplan Real Estate Management, the developer of 57 Ocean in Miami Beach, is now betting on a boutique luxury condo project on Ocean Drive in the South-of-Fifth neighborhood.

José Isaac Peres

José Isaac Peres

The Brazilian real estate developer, led by José Isaac Peres, is launching sales of Ocean Park South Beach at 304-312 Ocean Drive in South Beach, The Real Deal has learned.

The four-story building will have 10 units, including two duplex penthouses. Prices range from $1.5 million to $6.8 million, said Marcelo Kingston, managing principal of Multiplan Real Estate Asset Management.

Eloy Carmenate and Mick Duchon

Mick Duchon and Eloy Carmenate

Douglas Elliman’s Eloy Carmenate and Mick Duchon are handling sales.

The project marks the first to launch in the luxury market so far this year. And despite the condo market slowdown, Kingston said Ocean Park South Beach’s location, across the street from the ocean and Marjory Stoneman Douglas Park and close to shops and restaurants, with little competition in new luxury projects, will give it an advantage. He said 20 percent of the units, or two condos, have been reserved by friends and family buyers from Miami and Brazil.

“In our view, it’s good timing, a unique location, singular product and hard to replicate,” Kingston said.

Two- and three-bedroom units will range from 1,117 square feet to 1,715 square feet, with terraces ranging from 267 square feet to 1,194 square feet. Features will include private elevators, 10-foot ceilings, floor-to-ceiling windows, light solid oak wood and natural stone flooring, Wolf and Sub-Zero appliances, and kitchens by Poliform with Matte Touch cabinets.

The four-bedroom penthouses will each have 2,393 square feet with 1,564 square feet of terraces. The penthouses will include 12-foot ceilings, an upgraded appliance package with a tower wine cooler and double-refrigerator unit, and a rooftop deck with a private spa pool, summer kitchen and powder room.

Ocean Park South Beach will also have a second-floor amenity deck with a 36-foot pool, spa, Jacuzzi, poolside summer kitchen and outdoor dining area and lounge.

The project is designed by Revuelta Architecture International, with interiors by Marcela Lombana and landscaping by Gardner Semler Landscape Architecture.

Rio de Janeiro-based Multiplan is one of the biggest shopping mall owners in Latin America, and has also built a number of mixed-use projects connected to retail developments. In Miami Beach, Multiplan built Il Villaggio, a luxury condo and retail development at 1455 Ocean Drive. Forbes currently pegs Peres’ net worth at $1.7 billion.

The company is self-funding the Ocean Drive development, Kingston said. That allows the developer to “push the development schedule, not relying on banks, and takes away the lack of confidence buyers have not knowing the schedule.”

Construction is expected to begin in the fourth quarter, with completion in December 2021, he said.

Multiplan is also developing 57 Ocean, an 18-story, 70-unit luxury oceanfront condo project at 5775 Collins Avenue. Kingston said sales are approaching 50 percent. The project is starting to go vertical, and is expected to be completed in September 2021, Kingston said. Fortune Development Sales is handling sales.

The Ocean Drive project has been in the works for about a year, since Multiplan purchased the two adjacent empty lots for $10 million in December 2018. It’s within the Ocean Beach Historic District, and received approval from the historic preservation board last year.

Carmenate and Duchon have handled sales at other new Ocean Drive developments such as 1500 Ocean Drive, Il Villaggio and Glass. They said they will be targeting local buyers, including empty nesters from the surrounding areas who are looking for boutique buildings, as well as buyers from the Northeast.

“We find the South-of-Fifth area to be very active,” Duchon said.

“It’s priced right for the neighborhood,” added Carmenate. “You can’t get a three-bedroom for $2.65 million in new construction in South-of-Fifth.”

Historic preservation board rejects Blue Road’s plans for South Beach hotel

“We’re trying to save the historic district, not block or restrict anything”: Jack Finglass

Marcelo Tenenbaum and Jorge Savloff with the current building next to a rendering of the project

Marcelo Tenenbaum and Jorge Savloff with the current building next to a rendering of the project

Blue Road’s plans to convert a 34-unit South Beach apartment building into a 116-room hotel hit a snag after the project failed to get the minimum votes needed from the Miami Beach Historic Preservation Board.

The board voted 4 to 3 this week to approve an amended version of Blue Road’s plans to turn the 61-year-old Park Terrace Apartments at 355 19th Street into the more contemporary Park Avenue Hotel.

However, because the building falls into a historic district, Blue Road needed five affirmative votes from the historic preservation board to obtain the demolition permits needed to move forward. Following the vote, the board “continued” the item until September 9th.

It’s the second time the project has been continued. The board previously continued the project at its May 14 hearing after board members expressed another set of concerns over the proposed hotel’s design.

“They have to do their job. We have to do our work. We will find a compromise,” Marcelo Tenenbaum, a principal of Blue Door, told The Real Deal after the vote.
The project’s architect, Luis Revuelta of Revuelta Architecture International, admitted he was surprised.

“I think we came today with a high level of confidence that we were going to get approved,” Revuelta said.

But the three dissenting board members — Nancy Liebman, Jack Finglass, and Kirk Paskal — expressed concern that not enough of the original 1951 post-World War II structure was being preserved or utilized in the new hotel’s design. Under the project’s latest plans, 70 percent of the original building would be demolished.

“This is something I would expect from a more, non-historic district,” Paskal said. “A way to pay homage to something by leaving a little piece.”

Tenenbaum and Blue Road co-principal Jorge Savloff paid $14.27 million for the two-story, 22,000-square-foot apartment building in March 2018. The structure is two blocks away from the newly renovated Miami Beach Convention Center as well as the site of a future 800-room Miami Beach Convention Center Hotel that will be co-developed by David Martin and Jackie Soffer.

Revuelta presented plans for a five-story 44,466 square foot complex that included a rooftop pool deck and two outside elevator towers. It was a smaller version than what was proposed in May, and now includes a garden courtyard instead of a below grade parking area. The remnants of the original apartment building would be transformed into a hotel lobby and gym.
Liebman disapproved of the design, saying that it didn’t belong in a historic district. She also ridiculed the notion that a 116-room hotel is “boutique” as Blue Road portrayed it. “This looks like a giant box,” Liebman said.

Blue Road’s attorney, Alfredo Gonzalez, insisted that a hotel needs at least 100 rooms to “make it in today’s market.”

“A boutique hotel has to have 100 rooms?” Liebman said while rolling her eyes. “Only in Miami Beach. Save it. I can’t support this today or tomorrow.”

After the Liebman-Finglass-Paskal side won, Reveulta asked for instructions. Finglass replied that the developer should strive to use more of what’s already present. “You’ve got a huge historic piece over here. Make use of it,” Finglass told Revuelta, later adding: “We’re trying to save the historic district, not block or restrict anything. Use what you’ve got to make the district matter.”

Revuelta told TRD that he tried to address the issues raised during the May 14 meeting. “I thought we had done everything possible to react to staff and board comment,” he said, “and there is no way we can make this only two stories. It kills the deal.”

“We need a bigger scale to address food and beverage, to address operations,” Tenenbaum further explained.

Nevertheless, Tenenbaum is determined to solve “the conflict of different ideas” and come up with a design that works. “We will be back in September and we will try to do some adjustments and, hopefully, they will approve.”

Back again: Michael Shvo, partners to buy oceanfront Richmond Hotel in South Beach

The same partnership paid $103M for the Raleigh in February

Patricia McBride Herbert, Allan Herbert, and Michael Shvo with 1757 Collins Avenue

Patricia McBride Herbert, Allan Herbert, and Michael Shvo with 1757 Collins Avenue

Developer Michael Shvo and his partners are bulking up in South Beach. The partnership is under contract to buy the oceanfront Richmond Hotel, marking the group’s second purchase along Collins Avenue this year, sources told The Real Deal.

In February, Shvo’s New York-based SHVO, Bilgili Holdings and Deutsche Finance America paid Tommy Hilfiger and the Dogus Group $103 million for the 83-room Raleigh Hotel. The property is next door to the Richmond Hotel.

The Richmond, at 1757 Collins Avenue, has 92 rooms in a four-story, nearly 52,000-square-foot building. It was built in 1941 and sits on a 32,670-square-foot lot, records show.

The sellers are Patti and Allan Herbert, who represent the third generation of the family that has owned the hotel since its inception, according to the Richmond’s website. The Herberts are major benefactors to the Frost Science Museum and the University of Miami, where they donated $8 million to name the Patti and Allan Herbert Wellness Center.

No sale price for the Richmond has been disclosed. The Raleigh, which sits on a larger, 60,541-square-foot lot, sold at $1.24 million a key. It had been closed since Hurricane Irma hit South Florida in September 2017.

John Wijtenburg, director of Colliers International South Florida’s hotel group, estimates that the Richmond could sell for about $600,000 a key or $55 million. “It needs a good bit of work to come up to the standards of competitive properties in the area, but it’s a well known asset in that market,” he said.

The Raleigh acquisition marked the first in South Florida for Shvo, chairman and founder of SHVO, and his partner, Serdar Bilgili, the owner of the Istanbul-based real estate private equity firm BLG Capital.

In New York, Shvo’s projects include the Getty building in West Chelsea. The same partnership that acquired the Raleigh and is now acquiring the Richmond also paid $135 million for the office portion of 685 Fifth Avenue in 2018. The group recently won approval to convert that space to residential condos.

Other oceanfront hotels near the Raleigh and Richmond that have sold in recent years include the Sagamore Hotel, which Fort Lauderdale-based InSite Group and New York-based EL Group bought for $63 million in 2016; and the Shore Club Hotel, which New York-based HFZ Capital purchased for $175.3 million in 2014.

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Tommy Hilfiger group sells Raleigh Hotel in South Beach to Michael Shvo and partners for $103M

Tommy Hilfiger group sells Raleigh Hotel in South Beach to Michael Shvo and partners for $103M

83-key Art Deco hotel sold for $1.24M a room, likely a record in Miami area

Tommy Hilfiger, Michael Shvo and the Raleigh Hotel

Tommy Hilfiger and Dogus Group sold the Raleigh Hotel in Miami Beach to a partnership led by New York developer Michael Shvo for $103 million.

The deal breaks down to about $1.24 million a key, one of the most expensive hotel sales on a per-room basis in Miami-Dade County.

Shvo, Bilgili Group and Deutsche Finance Group acquired the 83-room Art Deco hotel at 1775 Collins Avenue, according to a release.

The Raleigh had been closed since Hurricane Irma hit South Florida in September 2017. Hilfiger said in a statement that despite working to restore and reopen the hotel, “this was an offer we just could not refuse.” The Wall Street Journal first reported the sale.

Hilfiger’s group paid $67.5 million for the property in 2014 and planned to turn the hotel, built in the 1940s, into a private club. But the property was rumored to be for sale following Hurricane Irma a year-and-a-half ago.

Shvo, chairman and founder of SHVO, said his group is committed to “bringing about its next renaissance,” calling the hotel “a nostalgic icon and a symbol of twenty-first century style and luxury.”

His business partner in the deal, Serdar Bilgili, is the owner of the Istanbul-based real estate private equity firm BLG Capital.

The Raleigh acquisition marks the first for Shvo in South Florida. In New York, his projects include the Getty building in West Chelsea. The same partnership that acquired the Raleigh also paid $135 million for the office portion of 685 Fifth Avenue in 2018.

In Miami, the deal could mark a new per-room record for hotel trades. Billionaire Michael Dell was set to buy 1 Hotel South Beach for about $500 million, or $1.2 million per key, but that deal has not yet closed.

Marriott pays $23.5M for South Beach hotel, plans renovation

The former Edgewater Hotel in South Beach
The Edgewater Hotel in South Beach is about to get a facelift and new name now that it’s been sold for $23.5 million to Marriott International’s timeshare division.
Marriott Vacation Club bought the 1930s-era building and its 49 suites, located at 1410 Ocean Drive across the street from Lummus Park. Marriott spokesperson Ed Kinney told The Real Deal that the 49 units were sold by a single seller, though he declined to name the entity. However, an Israeli company called the El-Ad Group lists the property under its portfolio holdings.
The hotel will now be known as the Marriott Vacation Club South Beach and is already taking reservations, according to a news release. Marriott will renovate the hotel’s suites and common areas through 2016.
“We are excited to offer our owners and guests another new addition to our collection of properties around the world that puts them right in the heart of South Beach and all it has to offer to visitors,” Stephen P. Weisz, president and chief executive officer of Marriott Vacations Worldwide, said in the release.
Marriott Vacation Club was originally committed to purchasing a separate 182-unit building in South Beach, Kinney said, but the deal fell through for undisclosed reasons. Then the opportunity to buy the Edgewater Hotel appeared, and Marriott closed on it.
“It’s not very big by our standards,” he told TRD.” But… we feel it’s a great way to get into the market.” 
As part of the re-branding, Marriott Vacation Club will open an off-site sales center for timeshares at the hotel. Kinney said the company is looking at a couple of nearby locations that they will close on in the near future.  — Sean Stewart-Muniz

Source: The Real Deal Miami