The Real Deal Miami

Lenders sue Royal Palm hotel owners

May 05, 2008 08:51AM

A fund controlled by investment management firm Blackrock has sued Guy Mitchell, majority owner of the Royal Palm hotel in South Beach that is in a stalled conversion to hotel-condo units. The suit alleges that Mitchell and his partners are overdue on loans borrowed to purchase the hotel for $128 million in 2005, and claims the mismanaged hotel is losing as much as $12 million per year. Amidst ongoing legal dispute, Mitchell has put the hotel up for sale for $220 million, according to sources.