The Real Deal Miami

Hotel Astor shuts down after allegedly owing more than $300k

Owner David Hart says he plans to reopen with a new operator
By Katherine Kallergis | October 23, 2018 04:30PM

Hotel Astor and David Hart

Hotel Astor is being sued by its ground lessor for allegedly defaulting on its lease, and faces separate lawsuits from its former law firm and ex-employees. In total it allegedly owes more than $300,000 in unpaid bills, court records show.

The 42-key hotel at 956 Washington Avenue in Miami Beach has been closed for about three weeks, owner David J. Hart confirmed. Hart said he’s in talks with a new operator and plans to reopen later this season, but declined to provide an opening date.

The ground lessor, 1651 Astor LLC, filed a lawsuit to evict the hotel from the property earlier this month, alleging it’s owed $160,433 in rent. Last week, the ground lessor requested that a judge strike down a motion by the hotel for a rent determination hearing, which the plaintiff called a “clear delay tactic” and a violation of the law, according to the suit.

Jeffrey Wertman of Berger Singerman, the plaintiff’s attorney, said the lease between both parties has been terminated. Wertman declined to comment further on the suit.

The hotel has had financial issues in the past. In a previous lawsuit, it said it failed to generate enough revenue last year to pay off a settlement to a former general manager, citing damage the hotel sustained from Hurricane Irma that forced it to close.

In a response to a lawsuit filed last year by hotel management company Stem LLC, the hotel said it had “suffered numerous economic hardships, too numerous to catalog, making it impossible to pay [Stem].”

There are currently six open lawsuits involving the hotel entity, Astor EB-5 LLC, according to Miami-Dade County records. Just last week, it was sued by Allen, Norton & Blue, P.A. for allegedly failing to pay $16,643 in unpaid legal bills. The firm entered into a contract with the hotel in August 2013, when it took over the ground lease for the Miami Beach property, court documents show.

In April of this year, SMS Lodging sued the hotel, alleging it was owed nearly $163,000 for unpaid management fees, expenses, off-site centralized back office, employees’ salaries, and other expenses that have been due since at least December 2017.

SMS entered into a hotel management agreement in April 2017, and terminated the deal in October of that year. As part of that agreement, the hotel was supposed to have at least $50,000 in an account for operating expenses at all times.

The Art Deco hotel, built in 1936, features a 5,000-square-foot restaurant and a courtyard with a pool.

The hotel entity Astor EB-5 was granted EB-5 status by the U.S. Citizenship and Immigration Services office in 2015, after the company secured 18 investors from Brazil, China, and Venezuela to fund $9 million in renovations. The investors put in $500,000 each in exchange for U.S. residency.