|By Douglas Hanks, The Miami
HeraldMcClatchy-Tribune Regional News
Dec. 31, 2009--Facing a foreclosure fight, the Sagamore says it still plans to pursue a Playboy club to turn around its troubled finances.
With its $32 million mortgage more than 90 days past due, lenders are suing to foreclose on the South Beach hotel and take possession of its oceanfront site.
The Sagamore plans to fight the foreclosure, a spokeswoman said, with a Playboy venture a central part of the hotel's attempted revival.
"The Playboy deal is still alive," Sagamore spokeswoman Carol Bell said.
LNR, the commercial lender servicing the Sagamore loan, previously objected to the Playboy deal, saying it risked sullying the South Beach hotel's reputation. Best known for its contemporary art collection, the 93-room Sagamore enjoys a reputation as one of South Beach's most stylish boutique hotels.
A confidential business plan circulated by the investment group planning to lease the restaurant and bar operation from the Sagamore describes an extensive effort to brand the Sagamore as a Playboy destination. Seventeen bungalows would be turned into Playboy rooms, with a suite modeled after the magazine's robe-wearing founder, Hugh M. Hefner.
But the main attraction would be a Playboy Club inside the Sagamore -- a nightclub featuring the waitresses in the famous Playboy Bunny outfits.
"The overall design will be CASUAL, WARM, SEXY, URBAN CHIC," the proposal for the Playboy Club South Beach reads. "Modern glamour for a new generation of sophisticated travelers."
Though the Sagamore would continue managing its hotel, the Playboy venture would take over the food and beverage operations. Playboy Bunnies would serve drinks on the beach, and the club would offer catering for Playboy-themed events throughout South Florida.
And though the nightspot would be open to the public, the proposal also anticipates significant revenue from locals and frequent vacationers paying $3,500 to become members of the club. Forecasts call for at least 450 members of the Playboy Club South Beach, generating about $1.6 million a year. The materials said members would be given VIP status at the club, "preferred" tickets for events and other perks.
Financial forecasts attached to the proposal predict $1.8 million in profit for the venture, which would license the Playboy brand and pay rent to the Sagamore. The venture, backed by a Boston investor called Tremont Realty Capital, would invest about $5 million upgrading the hotel and pay about $900,000 a year in rent.
The Sagamore loan requires about $2.1 million in payments a year through 2016. Under the Playboy deal, the Sagamore would keep the room rental revenue, which is the hotel's biggest profit center.
Marty Taplin, a Sagamore owner, said earlier this month that he thought the Playboy deal could salvage the Sagamore, which has struggled after its popular Social restaurant left in early 2008.
Taplin was not available for an interview Wednesday, Bell said. A LNR spokeswoman also declined to comment.
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