The Meruelo family was hit hard during the housing crash, losing several development sites to foreclosure. But the family isn't letting its past troubles prevent it from pursuing a massive expansion of the 484-room Deauville Hotel in Miami Beach.
The family is proposing a 21-story tower with 412 hotel rooms next to the iconic 56-year-old building at 6701 Collins Ave. That would almost double the number of rooms at the landmark property.
The family would also add 12 suites above a second-floor ballroom and reconfigure another ballroom and retail space on the ground floor to make room for a 124-space parking garage.
The family's plans come at a time when the hotel market in Miami Beach is thriving with rising occupancy and room fees.
It also comes when securing construction financing for new projects is tough to obtain, especially for developers like the Meruelos who handed properties over to lenders during the financial crisis.
"Construction lenders want strong guarantees of payment going beyond a hotel project itself," said Frank Nardozza, chairman and CEO of REH Capital Partners in Fort Lauderdale. His company provides advisory services to the real estate and hospitality industries. "The developer has to have a strong personal balance sheet to be able to provide guarantee of payment on the loan."
That may be a problem for the Meruelos. As a result of foreclosures, some family members were involved in litigation with lenders that sought their personal assets to recover some of the debt.
Return To 'Glory Days'
The Meruelos initially planned to build the tower in 2003, when they received city approval for a 150-condo high-rise. At that time, the South Florida condo market was regaining momentum. The project never materialized, but the family kept the city approval alive, said Miami architect Kobi Karp, who designed the tower and the proposed modification to turn the condo tower into a hotel.
The new tower is to be built partly on vacant land and partly on a section of the hotel's current service area on the south side of the project, Karp said.
The proposal also calls for restoring the existing hotel to its "glory days," he added.