Fontainebleau Hotel Faces an Uncertain Future

You’ve probably seen it, even if you’ve never been to Miami Beach.  The 1504-room Fontainebleau Hotel, located along Collins Avenue in that stretch of beach known as Millionaire’s Row, has been one of the area’s most renowned attractions for decades.  However, according to a September 4 article in the Wall Street Journal, The Fontainebleau has fallen on hard times and might become just another recession foreclosure.

A COSTLY RENOVATION

(above) Ambitious construction and renovation projects like this one at the new Las Vegas Fontainebleau may have over-extended the owners.

The hotel recently completed a $500 million, 2.5 year-long face-lift which began in 2005.  The cranes and dust were a familiar sight for joggers and walkers along the beachfront boardwalk for months on end.  Then, after the hotel opened, a freak rainstorm, which left much of the area flooded, caused part of the roof over the newly-revamped lobby to collapse, sending guests scurrying.  Now, that ambitious $670 million construction loan is on the verge of going into default, after the expiration of a 45-day grace period.

The owners, South Florida’s own Soffer family, had purchased the famous Miami Beach property in 2005 and immediately sought to restore the hotel to its former glory , when it served as a setting for a number of classic movies, like Goldfinger, The Bellboy, and Scarface —but harsh economic times of late caused their bold entree into big hotel projects to flounder.

Just last June, the 3 billion dollar renovation project of the Fontainebleau’s sister casino hotel in Las Vegas went into bankruptcy, leaving the Soffers in bad financial straits, and investors are waiting for the next shoe to drop.

THE SOFFER HOTEL DYNASTY

Jeffrey Soffer (pictured above) and his family own the Fontainebleau Hotel

Donald Soffer, now 76, began the family business in 1967, with the development of Aventura, a 785-acre complex of condominiums, upscale shops, office buildings and country clubs on what had formerly been swampland.

More recently, Soffer’s son, 41-year-old Jeffrey Soffer, known for dating supermodel Elle MacPherson and his affinity for large yachts and racing cars, chose to take the business into a new direction in the renovation and new construction of big hotels.  First on the list was the revamping of the 392-room Fairmont Turnberry Isle Resort in Aventura.  Later, Soffer secured an $800 million loan to construct a new Fontainebleau Hotel in Las Vegas.  However, lenders refused to provide funds to complete the project, leading Soffer to file for Chapter 11 bankruptcy protection.

Similar problems at the Fontainebleau Miami Beach came about not because of the national drop in hotel bookings—it’s done better than the 2009 Miami average with its 70% occupancy rate—but because developers stopped paying the contractors, who they have accused of overbilling and falsifying work records.  The contractors, for their part, maintain that it’s obvious that the hotel simply ran out of money, and now owes them $65 million.

In addition, according to The Wall Street Journal story, the hotel has failed to maintain cash management records for the auditors’ review, and has neglected to deliver audited financial statements to the lenders.

Without some kind of intervention or 11th hour deal, a significant chunk of Miami Beach history could soon end up on the chopping block.

PLAYGROUND OF STARS

Designed by renowned Miami modernist architect Morris Lapidus in 1954, The Fontainebleau was owned and operated by local hotelier Ben Novack until his bankruptcy in 1977.

Soon after its establishment, the hotel became a star magnet both behind and in front of the camera.  A popular hangout for rat-packers like Frank Sinatra, Dean Martin, and Sammy Davis, Jr., it also appeared in the James Bond movie, “Goldfinger”, as well as Frank Sinatra’s 1959 flick, “A Hole in the Head.”  The following year, Jerry Lewis used it as the location for “The Bellboy”.

(above) The Fontainebleau was prime stomping ground for the “Rat Pack”, from left: Peter Lawford, Dean Martin, Sammy Davis, Jr., and Frank Sinatra.

More recently, the property has been featured in Police Academy 5: Assignment Miami Beach, The Bodyguard, The Specialist and Go For It.  More recently, Reno 911: Miami filmed scenes there.

Along with the Hollywood glitz came a certain amount of notoriety, as well: The Black Tuna Gang, a Columbian marijuana-smuggling organization from the 1970’s, is believed to have run their business from a suite at the hotel.

Today, the hotel endures as a thriving bastion of Miami Beach nightlife, both in the culinary and clubbing aspects: LIV nightclub and Bleau Bar are current hotspots, while Gotham Steak, Scarpetta, and Blade Sushi Bar are favorite destinations for discriminating local diners.  In 2008, the Fontainebleau was added to the National Registrar of Historic Places.

THE LAST RESORT

Jeffrey Soffer, who has now put his $175 million yacht up for sale, recently made the following statement:

“As with most businesses during these particularly difficult economic times, we are facing challenges.  But our family has always worked its way through the inevitable downturns that occur in the real estate market.”

Its abundant history, stunning renovation and vibrant nightlife make the Fontainebleau a significant part of the local scene, and it will hopefully endure its current challenges.

Related Links: • The Biltmore Asks, Why Fontainebleau Hotel? • Fontainebleau Hotel Videos Related Categories: Hotels Miami: Travel News, Douglas Eames is a freelance writer, homespun philosopher and budget bon vivant who divides his time between Southern California and South Beach. See more articles by Doug. See more articles by Doug Was This Post Helpful? Please Share It With Others! Tweet

7 Comments on

"Fontainebleau Hotel Faces an Uncertain Future"

Commenting is not available in this weblog entry.

Discuss the surrounding area in our hugely popular Miami forum.