The Soffer family of South Florida, whose Fontainebleau casino-hotel in Las Vegas filed for Chapter 11 bankruptcy protection in June, also has debt-related problems at the original Fontainebleau hotel in Miami,
the
Wall Street Journal
reported.
The Soffers, who have a $7 billion real estate empire, bought the 55-year-old Miami Fontainebleau in 2005 and began $500 million worth of renovations, the article said.
Lenders, led by Bank of America, could declare a default on a $670 million construction loan for various reasons, including Fontainebleau’s failure to keep reserves to cover more than $60 million in contested liens against the property by contractors who have not been paid….
Fontainebleau executives issued a statement saying the hotel is “engaged in constructive negotiations with our lenders,” the
Journal
article said. The hotel has not missed a debt payment, the report noted.
The Miami troubles mark the latest setback in the Soffers’ recent push into big hotel projects, spearheaded by 41-year-old Jeffrey Soffer, the son of founder Donald Soffer. Known for racing cars, sailing on his 257-foot yacht and dating supermodel Elle MacPherson, Jeffrey Soffer extended the family’s luxury-property holdings with the Fontainebleau projects and the $130 million renovation of he 392-room Fairmont Turnberry Isle Resort in Aventura, Fla.
According to the report, Jerry Soffer signed $220 million in personal guarantees to secure financing for the Fontainebleau Las Vegas, which filed for Chapter 11 after lenders refused to provide it funds to complete the project. He has put his yacht on the market for $175 million.
Donald Soffer, 76, founded the business in 1967, when he bought swampland in northern Dade County to develop Aventura, which consists of country clubs, condominiums and office buildings and office buildings, the
Journal
reported. (Source:
Wall Street Journal,
Sept. 4, 2009.)
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