Miami Beach Insider Blog

by Alex Shay

September 11, 2009

Miami Beach's Fontainebleau Hotel may face a judgment of default on unpaid contractor bills, according to a report by the Wall Street Journal. Lenders had previously agreed with the Fontainebleau not to declare, for 45 days, $670 million of construction debt to be in default; the agreement expired August 31.

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The Fontainebleau violated the terms of its loan, when they failed to maintain $60 million in reserves to cover constructions liens on the luxury oceanfront hotel residence, according to the WSJ report. The Fontainebleau denies violating the terms of the agreement, and is contesting the debts. Executives refused to be interviewed, but issued a statement to the Miami Herald defending their position.

Howard Karawan, COO of Fontainebleau Resorts said:

"Fontainebleau Miami is a world class resort and our performance is among the strongest in the area. While this tough economy has created challenges that we are actively addressing with our lenders, Fontainebleau Miami will continue to provide an outstanding experience to its guests for many years to come.''

The Fontainebleau is primarily owned by Jeffrey Soffer, whose father, Donald Soffer, a South Florida real estate mogul, developed the City of Aventura in the 1960's. According to the Miami Herald, about a year ago, Jeffrey Soffer sold of half of the luxury oceanfront hotel, along with half of its debt, $375 million, to Nakheel Hotels, the investment arm of the Dubai government.


Alex Shay is a Miami local & real estate blogger. You can read more of his work online at Miami Real Estate.

Latest Comments

  • Fontainebleau Hotel

    It's a damn shame to read that half of this fabulous hotel is now owned by arabs, and Soffer should have left good enough alone. There was NO need to fix what was not broken, with the exception of a few things perhaps, but to spend tons of millions of dollars for a 'new and improved' hotel was just damn stupid and ridiculous! These freak'n people, the developers or whoever they are who think 'old style' Miami Beach needs revamping costing mega millions are just greedy bastards, redoing what was already done and done well when these people were still in diapers really infuriates me. 'Cleaning' up a bit is one thing, but to go to extremes like this is quite another. Is the inside of the hotel recognizable from its former self? My brother was a hairstylist there back in the 60's when Ben Novac owned it and Buddy Maurice owned the hair salon. Granted anything may need sprucing up, but, when things get refaced and stripped of its originality, these developers/investors/new owners should be shot!! Whatever these people are they are the ones putting Miami Beach in ruins. STOP the crap now, enjoy our fabulous hotels with it's old style flair and repair whats truly needed and not what 'they' think is needed. That's the mentality of greed. And the sad part is that it's done already!

    Posted by Sandra Conti July 06, 2010 15:55:34

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