Hollywood claims $1.7M of the proceeds from $190M sale of Margaritaville

Developer Lon Tabatchnik had agreed to pay the city 5% of any profit on the sale of the 349-room oceanfront resort, which he and Starwood Capital sold in April

Miami /
Oct.October 20, 2018 11:00 AM

Margaritaville Hollywood Beach Resort

Hollywood’s municipal government demanded that the developer of Margaritaville Hollywood Beach Resort and his partner pay the city $1.7 million of their proceeds from the sale of the 349-room resort.

The developer, Lon Tabatchnik and his partner, Starwood Capital, sold the Margaritaville resort on April 12 for $190 million.

Under terms of a deal with the city, Tabatchnik agreed to pay the city 5 percent of the profit from a sale of Magaritaville, which opened in 2015 on a city-owned, five-acre site along the ocean.

The city conducted an audit of the $190 million sale of the 17-story resort to a private equity firm after Tabatchnik claimed that he and Starwood Capital failed to make a profit on the sale of Margaritaville.

The city attorney for Hollywood, Doug Gonzales, wrote in an Oct. 11 letter to Tabatchnik that the audit results show that he and Starwood Capital owe the city $1,719,962.41.

Peter Hernandez, the only city commissioner who voted against the Margaritaville development five years ago, told the Sun-Sentinel he was happy with the outcome of the city’s audit but had hoped the city’s demand for payment would be closer to $3 million.

Another city commissioner, Kevin Biederman, told the newspaper he expects Tabatchnik to challenge the city’s $1.7 million claim, calling its basis “an interpretation of contract language.”

After the April sale of Margaritaville, several Hollywood commissioners said they weren’t aware that $28 million of taxpayer money that partially funded the resort’s development was a grant, not a loan, from the city. [Sun-Sentinel]Mike Seemuth


Related Articles

arrow_forward_ios
David Grutman and Pharrell’s Goodtime Hotel had received nearly 30 noise violations (Carma Connected, Getty)
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Too much of a good time? David Grutman and Pharrell’s Goodtime Hotel could lose entertainment permit
Related Companies Chairman Stephen Ross with One Flagler (Related, Getty)
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Prayers answered? Related Companies closes on church site for planned office tower in downtown West Palm
Grover Corlew principal Mark Corlew with Bank of America Tower in Boca Raton (Grover Corlew)
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
Grover Corlew buys Bank of America Tower in Boca Raton for $45M
The partially collapsed 12-story Champlain Towers South condo building (Getty)
Inside the tug-of-war over the Surfside condo site’s future
Inside the tug-of-war over the Surfside condo site’s future
Moishe Mana and the downtown parking lot he purchased (Google Maps, Getty)
Moishe Mana expands downtown Miami assemblage with $12M purchase
Moishe Mana expands downtown Miami assemblage with $12M purchase
(Photos courtesy of Miami Historic Preservation, Smith Aerials, Colliers)
Development site near MiamiCentral hits the market
Development site near MiamiCentral hits the market
Alliance Residential Company CEO Bruce Ward and 6595 Morikami Park Road (Google Maps)
Alliance Residential buys site, scores $46M construction loan for senior apartments in Delray Beach
Alliance Residential buys site, scores $46M construction loan for senior apartments in Delray Beach
Arbor Management Acquisition Company heads Ivan Kaufman and Maurice Kaufman with a rendering of Aventura Park (Anillo Toledo Lopez, iStock)
Arbor Management buys multifamily dev site near Aventura for $10M
Arbor Management buys multifamily dev site near Aventura for $10M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...