Shelborne hotel owners begin $85M gut renovation

Demolition is underway at the Shelborne South Beach hotel, as the owners work on restoring its Art Deco and MiMo design as part of an $85 million renovation project. 

Toronto-based Westdale Properties, New York-based King Street Capital Management and Cedar Capital Partners acquired a majority of the condo-hotel at 1801 Collins Avenue three years ago for $120 million. The following year, they proposed a major restoration of the oceanfront property. 

Work began about a month ago, according to Mitchell Cohen, Westdale’s COO. It’s expected to be completed in early 2025. The hotel will remain closed throughout the project. 

The Shelborne, built in 1940, was designed by Igor Polevitzky and his partner, Thomas Triplett Russell. Morris Lapidus designed an eight-story addition west of the hotel in 1958. 

The developers secured $23 million in new financing from Goldman Sachs in October, boosting their mortgage with the bank to $163 million, records show. 

Cohen said the gut renovation will be focused “on protecting the heritage of the building” and “getting rid of the desecration” that was later added to the property. 

The Westdale, King Street and Cedar Capital joint venture will demolish the townhomes in the lobby, bring back two-story windows fronting 18th Street, restore some of the flooring, and redesign the guestrooms, food and beverage venues, pool deck, cabanas, meeting space and more. 

Venice, California-based Proper Hotels, which will operate the 251-key hotel when it reopens, is involved in the redesign. It will mark the first Proper hotel in Florida, according to a press release. 

W.P. Carey and Russell Galbut sold the property in 2020. Galbut and his family had been involved in the hotel for decades. His nephews, Keith Menin and Jared Galbut, worked the front desk, as one of their first jobs in the industry, and their Menin Hospitality previously operated the hotel. 

Galbut and some of his partners in the hotel were also accused of authorizing illegal assessments to renovate and repair the hotel, but they won a yearslong legal battle centered around the assessments in 2017.

Last year, Westdale acquired a pair of apartment buildings in Bay Harbor Islands for $22.5 million. The building at 9881 East Bay Harbor Drive was recently renovated and is being leased up. Westdale is also an investor in local hospitality businesses, including David Grutman’s Swan and Komodo, according to the release. 

In Miami Beach, the Shelborne hotel is immediately north of the shuttered Raleigh, South Seas and Richmond hotels. Developer Michael Shvo and his partners plan a Rosewood Hotels-branded restoration and redevelopment of the 3-acre assemblage into a luxury hotel and condo project that is expected to include a Langosteria beach club. 
Also nearby is the Shore Club hotel, which has been closed, as well, and is expected to be redeveloped into an Auberge-branded luxury hotel and condo development. Witkoff and Monroe Capital are the developers of that project.

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