The Sagamore Hotel’s new owners’ plans to renovate the historic property got a strong pushback on Tuesday by several members of the Miami Beach Historic Preservation Board.
The board approved a certificate of appropriateness for the partial demolition, renovation and restoration of the hotel at 1671 Collins Avenue, built in 1948. But it rejected design plans that would have replaced three windows on the front porch of the building with doors that would allow servers to more easily access a planned lobby bar.
The board requested that the Sagamore’s new owners, Fort Lauderdale-based InSite Group and New York-based El Group, which bought the waterfront hotel for $63 million in April 2016, return in March with new plans for the area that faces Collins Avenue.
While board members said they liked plans for proposed bungalows and extensive renovation of lobby areas, several like longtime preservationist Nancy Liebman, who recently rejoined the board, strongly criticized plans for the front patio saying she could not “abide by adapting this building to a bar.”
New board chairman, Stevan Pardo said he was concerned because “we’ve never made a change like this,” adding, that he was concerned about setting a precedent that other building owners in the historic district might try and use in the future. However attorney Niesen Kasdin, representing the owners, said the planned front patio renovations were not a “radical remodeling of an important historic site, but its adaptive re-use,” something he said had long guided preservation guidelines in Miami Beach.
The 93-room hotel encompasses 92,000 square feet on a 43,125-square-foot site, according to Miami-Dade property records. The five-story property previously sold for $315,000 to Sagamore Partners in 1997.
Project architect Victor Rodriguez of Rodriguez Diaz Architects said major renovations were planned for the property but much of the work will be “upgrading systems of the building,” like air-conditioning, plumbing and other interior renovations. The last major renovation of the building was in 1998.
InSite and El Group took out a $45 million loan on the oceanfront property in late October, arranged by New York-based HKS Capital Partners. EBJ/InSite, the joint venture entity that purchased the hotel for $63 million in April, received the funding from Bank Hapoalim.
John Harrington, partner in HKS Capital Partners, told The Real Deal that the hotel’s owners, led by the El Group’s Ben Josef Group, plan to add 48 guest rooms to the hotel.
Harrington secured the five-year $45 million loan with 30-month interest-only during the renovation period. The interest rate during renovation is at 30-day-Libor + 2.8 percent float, 3 percent minimum.
Records show Ben Shmul, CEO of InSite, signed the loan documents. The new owners bought the hotel from Sagamore Partners days before $41 million in debt and interest payments were due. The Sagamore’s late owner Martin Taplan died on March 8 after falling from the 25th-floor balcony of his step-mother’s penthouse condominium in Bal Harbour.
At $63 million, InSite and El paid $677,419 per room for the hotel which was known for years for it’s art-filled lobby.