Sep. 18--Tearing down the front of an old building will drive up costs for Miami Beach's Setai condo hotel $6 million plus another $10 million in federal tax credits, according to developer Jonathan Breene. 

The Setai, located at 20th Street and Collins Avenue, was slated to consist of a 40-story condo tower along with an eight-story boutique hotel wrapped inside a 1936 façade. 

Last Friday, Miami Beach's building department ordered the old façade torn down, weeks after a 6-foot-by-4-foot chunk crashed to the ground. The Miami Beach Historic Preservation Board, which stipulated that the façade be maintained in exchange for development rights, will decide Oct. 8 whether the edifice can be rebuilt. 

Breene said the Setai Group worked extensively to maintain the original structure, bringing in millions of dollars worth of steel bracing to keep the façade pinned up while hotel construction continued inside. The total cost of the now-useless steel pilings plus tearing down and rebuilding the façade will be $6 million, Breene said. 

The developers also recently learned they would have received a $10 million federal tax credit upon completion as a reward for preserving the historic structure. 

The additional costs are expected to drive up the Setai's cost to $190 million. 

The glitch recalls the delays with Donahue Peebles' Royal Crowne Plaza, whose original 1939 structure was declared unfit mid-construction, and had to be demolished and rebuilt. 

The Setai's developers are still shooting for an early 2004 opening. 

"We were jumping into the unknown," Breene said. "We were trying to preserve the building in a safe manner. No engineer can tell you exactly what's going to happen, whether one side will collapse or hold." 

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(c) 2002, The Miami Herald. Distributed by Knight Ridder/Tribune Business News.