|By Julie Brown, The Miami
HeraldMcClatchy-Tribune Regional News
July 08, 2010--On Hollywood beach, about a dozen colorful Adirondack chairs now dot a sandy lot next to the city's bandshell.
The chairs are a symbol of what's to come -- and what will likely disappear -- from one of the last vestiges of Old Florida. The future is painted in bright yellow, blue and red -- the word "Margaritaville" emblazoned on each chair.
On Wednesday, Hollywood city commissioners outlined a creative financing arrangement for the $126 million, 17-story Margaritaville hotel/restaurant -- a project they hope won't turn into another lost shaker of salt.
For nearly a decade, the city has spent hundreds of thousands of dollars, and developers have tried and failed to develop the six-acre city-owned site at Johnson Street and A1A.
Finding the investors with enough scratch to finance a money-making venture has been a struggle, especially during the nation's loan squeeze.
Ironically, it's that very distressed economy that makes this time-worn area of the beach eligible for foreign investment. About $75 million will come from immigrants who will each provide a $500,000 loan to developers in exchange for a green card to live in the United States.
The program, run by the U.S. Department of Immigration, has worked in other places around the country, and developer Lon Tabatchnick is confident he will attract enough foreign investors, some as far away as China.
From the beginning, Hollywood city commissioners have been skeptical about whether Tabatchnick -- or anyone -- would show them the money.
On Wednesday, commissioners were obviously impressed. The financing structure will be funded by a series of sources including foreign investors, $10 million in developer equity, and a $10 million loan from the city's Community Redevelopment Agency to be repaid in 10 years at 5 percent interest.
The city will also have to guarantee the bonds issued by the developer. If however, the project fails, the city will become owner of the hotel.
Assistant City Manager Cathy Swanson-Rivenbark assured the commission that the deal would not leave the city holding the bag as previous deals did.
"We have this buttoned up in a good way for the city of Hollywood," she said at the close of her presentation during a special CRA meeting.
The developer will pay the city $20,000 a month during construction, set to begin Oct. 1, 2011. After the project is complete, the city will be paid $500,000 a year, with a 3 percent increase annually. The owners will have a 99-year lease on the property.
Besides the financing, questions were raised about the beach's bandshell. Tabatchnick's plan calls for a state-of-the-art amphitheater in the middle of Johnson Street, facing the beach.
Commissioner Patricia Asseff said she was also worried about a plan to name the amphitheater, joking that she wouldn't want it to be called "Elvis Presley Theater."
After the meeting, Tabatchnick said he has no plans to demolish the bandshell -- although it will no longer be used as a concert stage. "We're looking at different alternatives to incorporate it into what we want to do on the property," Tabatchnick said.
He also said the project, run by JJW Construction of Fort Lauderdale, will create 3,000 jobs.
Tabatchnick arranged for the colorful chairs on the site to get residents excited about the project, named Margaritaville after the song made famous by Jimmy Buffett, who holds a stake in the development, and has lent his name to a number of similar resorts around Florida.
"I figured it represents the hotel's laid-back style, and it was better than a banner saying 'Welcome to Margaritaville.' "
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