Miami Beach Fontainbleau Resort Hotel
Miami Beach Fontainbleau Hotel may face a judgement of default on unpaid contractor bills, according to a report by the Wall Street Journal yesterday. Lenders had previously agreed with the Fontainbleau not to declare, for 45 days, $670 million of construction debt to be in default; the agreement expired August 31.
The Fontainbleau violated the terms of its loan, when they failed to maintain $60 million in reserves to cover construction liens on the luxury oceanfront hotel residence, according to the WSJ report. The Fontainbleau denies violating the terms of the agreement, and is contesting the debts. Executives refused to be interviewed, but issued a statement to the Miami Herald defending their position.
Howard Karawan, COO of Fontainebleau Resorts said: “Fontainebleau Miami is a world class resort and our performance is among the strongest in the area. While this tough economy has created challenges that we are actively addressing with our lenders, Fontainebleau Miami will continue to provide an outstanding experience to its guests for many years to come.”
The Fontainbleau is primarily owned by Jeffrey Soffer, whose father, Donald Soffer, a South Florida real estate mogul, developed the City of Aventura from swampland in the 1960’s. According to the Miami Herald, about a year ago, Jeffrey Soffer sold off half of the luxury oceanfront hotel. along with half of its debt, $375 million, to Nakheel Hotels, the investment arm of the Dubai government.