The Real Deal Miami

South Beach hotel developers seek settlement

By Erik Bojnansky | January 12, 2009 11:18AM

An attorney for the company renovating the Savoy Hotel said her
client is close to a legal settlement with the bank that loaned it $39 million to develop 111 luxury hotel-condo units on South Beach.

Alexandra Deas, attorney for Savoy Hotel Partners, told Miami
Beach’s Zoning Board of Adjustments on January 9 that mediation has been
scheduled between her client and BankFirst on February 16.

BankFirst’s foreclosure action in July 2007 stopped Savoy Hotel
Partners from obtaining building permits needed to complete a service
corridor for the 75-room Savoy Hotel at 425 Ocean Drive. The Zoning
Board of Adjustments unanimously granted an extension, giving Savoy
Hotel Partners LLC until November 4 to obtain a permit.

Savoy Hotel Partners (controlled by Avi Werjuka and Gary Cohen) planned
to convert the Art Deco-era Savoy and Arlington hotels in a hotel-condo, with units selling for between $750,000 and $7 million.
The developers succeeding in renovating the two hotels, uniting them
under a single operation managed by Monarch Hotel and Resorts, in
2006. However, the conversion and plans to construct a 75-foot condominium on the site stalled.

About 16 months ago, BankFirst began foreclosure action against Savoy
Hotel Partners, Abraham Werjuka and Monarch Hotel and Resorts,
claiming the Savoy’s developers and operators owed $39.5 million.

Savoy Hotel Partners countersued BankFirst for mishandling the
transaction and not cooperating with the company’s deposition
requests. According to BankFirst’s court documents, the amount Savoy’s
developers owe the bank and other lenders has increased to more than $41