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Sonesta Plans to Sell its Key Biscayne Hotel Site After a Failed
 Attempt to Build a Luxury Condo-hotel There

By Douglas Hanks, The Miami HeraldMcClatchy-Tribune Regional News

September. 3, 2009 --Sonesta plans to sell its prized Key Biscayne hotel site after a failed attempt to build a luxury condo-hotel complex there.

Consultatio S.A., an Argentine developer, expects to close on the oceanfront site by the end of September, paying $78 million for land that four years ago Sonesta valued at $120 million.

Fortune International also appears set to sustain a big loss in the deal. The Miami-based developer paid $30 million to Sonesta in 2005 in exchange for a 50-50 partnership with Boston-based Sonesta to redevelop the site into a luxury condo-hotel resort.

$56M MORTGAGE

The real estate has a $56 million mortgage that will be paid from the sale revenue, said Sonesta treasurer Boy Van Riel. In a regulatory filing, the publicly traded Sonesta said it was taking $11.5 million in proceeds.

A Fortune spokeswoman said President Edgardo Defortuna was unavailable Wednesday to comment on the company's potential profit or loss in the Sonesta deal.

But in a statement, Fortune hinted at future profits to come: "Fortune International is a key player in the South Florida real estate market, especially in Key Biscayne, and therefore will likely remain involved in the project."

Consultatio did not respond to an interview request Wednesday, but an executive close to the deal said the company planned to build a residential condo complex on the land.

Holliday Fenoglio Fowler's office in Coral Gables brokered the deal, which is slated to close by Sept. 25.

The Consultatio deal would officially end an era that really came to a close in August 2006. That was when the Sonesta Beach Resort -- once one of the Miami area's most iconic hotels -- shut down during its 37th year of operation to prepare for demolition.

But the demolition crews never came as the City of Key Biscayne rejected plans to build a $300 million condo-hotel there. By the time Sonesta and Fortune International opted instead to build traditional condos on the site, the real estate market had soured and the project stalled.

'BITTERSWEET'

"We loved operating that hotel. And it was a very successful hotel," said Peter Sonnabend, executive chairman of the board for Sonesta, a publicly traded hotel company in Boston. The Consultatio deal, he said, "was absolutely bittersweet."

He said if Sonesta and Fortune had not launched the condo-hotel venture, the Key Biscayne hotel would still be operating on the site. "It was very successful at the time it closed," he said. "Absolutely."

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Copyright (c) 2009, The Miami Herald

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