Developer To Continue With Plan To Raze Resort Despite Sonesta Review
Written by Eric Kalis on June 7, 2007
By Eric Kalis
Fortune International Realty officials say they are moving on plans to raze Sonesta Beach Resort in Key Biscayne and replace it with luxury condominiums despite uncertainties about the company’s partner.
The project should not be affected by a decision of the board of directors of property co-owner Sonesta International Hotels Corp. this week to hire investment banking and securities firm Goldman Sachs & Co. to review the company’s shareholder strategies, officials of both companies say.
Fortune International plans to build 165 residences averaging 3,700 square feet in four or five towers with resort amenities at the 350 Ocean Dr. property. The complex is to have a restaurant, a lounge and landscaped plazas among other amenities, project officials say.
"We are in the process of getting the construction drawings started," said Fortune International Principal Edgardo Defortuna. "I don’t foresee any changes. The project was approved [by the Key Biscayne Village Council in April], and we hope to be ready to offer the product by the end of the year."
Fortune International obtained half-ownership of the 10.5-acre site in 2005 for $30 million. The hotel closed last August as the permitting process began.
The hotel company’s internal review with Goldman Sachs does not necessarily mean Sonesta wants to sell its half of the Key Biscayne property, said Peter Sonnabend, company CEO and vice chairman. Goldman Sachs should have recommendations prepared for the company within a few weeks, he said.
"Key Biscayne is a major asset of our company," Mr. Sonnabend said. "We are excited about the residential project, as is our partner. … Part of what Goldman Sachs will do is evaluate each project in the context of its overall engagement with our board."
Sonesta’s South Florida portfolio includes hotels in Coconut Grove and Sunny Isles Beach.
Fortune International officials had wanted to build condo-hotel units, but Key Biscayne planning officials and community activists fiercely opposed the concept. The company then decided to change plans to build permanent residences. The condo towers are expected to be about 150 feet high.
The possibility of merging the adjacent Grand Bay clubhouse, which Fortune agreed to buy in April, with the Sonesta property exists, but company officials say they have not finished plans for the Grand Bay site. The 450-member clubhouse is to operate normally for now.
While Key Biscayne may not be immune from the residential real estate slowdown, the strength of the Sonesta site should help the project generate substantial interest once it hits the market, Mr. Sonnabend said. "People unrelated to our company have told us our site is among the very best in South Florida," he said. "Our view is that there is a market for the very best of anything. A lot of buyers would like to acquire residences on the beach."