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The FaulknerUSA and Hilton Hotels Plans to Build a 1,000-room Luxury Hotel Next to the
 Fort Lauderdale Convention Center a Year Behind Schedule

Project May Be Put Back Out to Bid
By Scott Wyman, Sun Sentinel, Fort Lauderdale, Fla.McClatchy-Tribune Regional News

Jan. 19, 2008 - The developer of Broward County convention center hotel could lose its role in the $400 million project and be replaced by a competitor because of continuing questions about the developer's financial health.

County officials want FaulknerUSA to prove it can overcome legal problems in Texas that include a bank's suing to collect $6.1 million in loans, a $6.6 million court judgment and millions more in claims by irate subcontractors. At the same time, Faulkner's partner in the Broward deal, Hilton Hotels, is working up plans to replace the firm if necessary.

In an unusual move, Hilton brought the development partner of rival bidder Marriott Hotels to a meeting with county officials last week to discuss what could happen if Faulkner were out of the picture.

"There is nothing that says Faulkner is dropping out of this deal, but they have to respond to us that they have the wherewithal to do this project," County Administrator Bertha Henry said. "We will not enter into a development agreement with a company that is not stable."

Plans to build a 1,000-room luxury hotel next to the convention center in Fort Lauderdale are a year behind schedule. County commissioners chose FaulknerUSA and Hilton Hotels over Marriott and Hensel Phelps Construction in November 2007.

The County Commission has not discussed Faulkner's problems. That discussion will likely come shortly.

A key commissioner who was a swing vote in the 2007 decision, Ken Keechl, said he wants to dump the Faulkner-Hilton team and seek a new round of bids. "The current proposal has become so problematic for so many reasons that it is only fair to put it back out," Keechl said.

Henry said she and her staff became particularly concerned about Faulkner in early December after learning about JPMorgan Chase Bank's suit. JP Morgan, which has been part of the Hilton-Faulkner team in Broward, alleges in the Texas suit that Faulkner failed to pay off a loan on time in October, and is demanding $6.1 million.

Hilton and Faulkner have told the county they remain partners, but Hilton has also said it will have a backup plan. Representatives of the Hilton-Faulkner team could not be reached for comment.

Although Henry said the county has not encouraged a breakup of Hilton and Faulkner, she said officials agreed to sit down with Hilton and Marriott's partner and discuss the project, which is expected to cost more than $400 million.

Critics of the Faulkner-Hilton deal said the effort to find a backup developer represents a major break from bidding protocol, particularly if the backup developer is part of a competing bid. Replacing Faulkner would mean replacing the firm that signed the bid and led the presentation on the proposal to commissioners.

"You are standing the procurement code on its head," County Commissioner John Rodstrom said.

Scott Wyman can be reached at swyman@sun-sentinel.com or 954-356-4511.

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Copyright (c) 2009, Sun Sentinel, Fort Lauderdale, Fla.

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