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FORT LAUDERDALE, FL-Years of planning that went into a Downtown convention center hotel appears headed straight to court, now that elected Broward County officials have terminated a ground lease with the project developer.

The Broward County Commission has voted to terminate all further negotiations with Peebles Atlantic Development Corp., when the Miami-based hotel development company rejected proposed revisions to a fourth amended lease on the county-owned site.

By rejecting the revisions, the commissioners argued, the Miami company defaulted on the ground lease.

“We’re not surprised by the commission’s actions,” Michelle Kohler, a Peebles Atlantic vice president, tells GlobeSt.com. “We believe the lease is in full force and effect and disagree that the commission had the right to declare us in default. In fact, we believe it is the county that is in breach of the ground lease. We are evaluating our options with legal counsel and will proceed accordingly.”

The company thinks the revisions in the fourth-amended lease were so stringent that it dissuaded Wyndham International Inc. from continuing with the project as a joint-venture partner and hotel operator. Earlier this year, Wyndham tentatively agreed to invest $15 million in the project and possibly another $10 million in contingency funding for any cost over-runs.

“Wyndham did withdraw its support,” Kohler acknowledges. “They did cite the difficulty of dealing with the Broward County Commission.”

Following considerable debate, the commission directed the county administrator and county attorney to re-evaluate the county’s options and to begin work on a new development strategy.

As part of the re-evaluation process, the commission directed staff to seek the counsel of the nine-member Broward County Tourist Development Council–a commission-appointed group that includes several members of the local hospitality industry.

Besides seeking advice from TDC members, the commission also directed the county administrator to begin the search for a project consultant, whether that is a new adviser or the firm that worked with the county over the past several months during negotiations with Peebles Atlantic.

No matter the outcome, however, the commission expressed an interest in retaining a private developer for the project rather than financing development through public tax dollars. Before the deal fell through, the county envisioned development of an $81 million, four-star hotel.

Nearly three years in the making, the proposed hotel deal with Peebles Atlantic nearly collapsed in January, when the two sides reached a standstill agreement. Although they later changed their minds, the commission then refused to grant the Peebles any subsidies.

To explore possible alternative action, the commissioners subsequently retained Strategic Advisory Group LLC as a consultant to the project.

The Pittsburgh-based consulting firm advised the county it could simply withdraw its support for the Peebles project, subsidize the project at an estimated cost of $8 million to $11 million or take advantage of Internal Revenue Services rules that would allow the county to develop the hotel.

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