X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.